Oil Prices Surge as Iran-US Talks Stall Over Compensation

Oil prices surged on Monday after negotiations over compensation for war damages hit a stalemate between Iran and the United States. The Strait of Hormuz, through which a fifth of global oil and liquefied natural gas passes, remains closed.

The Brent crude futures price jumped $3.57, or 4.3%, to $87.13 per barrel by 17:17 GMT, while US West Texas Intermediate crude futures rose $3.36, or 4.3%, to $81.51. The increases came after the two nations traded demands for compensation, with Iran insisting that the US lift sanctions and meet other conditions before reopening the waterway.

Iranian Foreign Minister Abbas Araqchi said on Sunday that Tehran would not initiate talks until Washington adheres to an interim deal signed in June. This stance led traders to believe that tighter supplies are more likely in the short term, according to Dennis Kissler, senior vice president of trading at BOK Financial.

Additionally, Ukrainian strikes hit Russian refineries and tankers in the Black Sea, further threatening supply. The Iran-aligned Houthis also struck Saudi Aramco's Jazan refinery on Sunday, with Saudi Aramco postponing its restart until August 30 due to recent Houthi attacks.