Oil Prices Surge as US-Iran Peace Hopes Continue to Fade
Oil prices have reached near three-week highs as hopes for a US-Iran peace deal continue to fade. The Brent crude futures price climbed 7 cents, or 0.08%, to $90.94 a barrel by 1031 GMT, while U.S. West Texas Intermediate crude futures were up 53 cents, or 0.63%, at $85.03 a barrel.
The prices are the highest since July 30 and July 31 for Brent and WTI futures respectively. The increase is attributed to US President Donald Trump's decision not to extend the US-Iran peace agreement and continued security concerns in the Strait of Hormuz.
Iran has stated that it will keep the Strait of Hormuz closed until the U.S. meets the conditions of the interim deal signed in June, which Trump had previously labelled as 'over'. Iran's top negotiator Mohammad Baqer Qalibaf made this comment after a senior Iranian official told Reuters on Monday that Iran will shift to a 'fully offensive' military posture.
Analysts have warned that the lack of any kind of deal will have an impact on oil price expectations further out in 4Q and even in 2027. However, some oil is still escaping through the Strait of Hormuz, albeit at single digits, with Saudi Aramco resuming oil loadings from inside the Strait.