Oil Prices Stabilize Amid US-Iran Conflict Uncertainty
Oil prices edged higher on Tuesday, recovering a small part of Monday's steep losses, as the market weighed conflicting signals over whether a diplomatic resolution to the US-Iran conflict is genuinely within reach.
The initial drop came after President Trump said on Sunday he was holding off on new strikes against Iran pending talks aimed at ending the conflict and settling the dispute over control of the Strait of Hormuz. However, Iran's Foreign Ministry spokesman Esmail Baghaei rejected Trump's characterisation, saying no negotiations with the United States were taking place.
The disagreement centers on how to interpret a memorandum of understanding reached in June, with Washington maintaining that the agreement required Iran to open the Strait of Hormuz to shipping, while Tehran argues the text explicitly preserved its authority over the waterway.
Despite the dispute, physical flows through the strait have held up according to Barclays, with crude oil and refined product net exports through Hormuz averaging 4.2 million barrels a day in the week ending July 31, up from 3.2 million bpd the previous week.