US-Iran Deal Stalls: Oil Prices Surge as Strait of Hormuz Tensions Escalate

Oil prices surged sharply on Monday as market expectations for a US-Iran agreement to reopen the Strait of Hormuz shipping lanes cooled dramatically. The latest tensions were compounded by Yemen's Houthi forces striking Saudi Arabian refining facilities again, forcing anxiety about near-term supply tightness.

The price of Brent crude futures jumped 4% to breach $86 per barrel (approximately TWD 2,800) for the first time since July 31. US WTI crude futures also gained more than 4%, climbing above $81 per barrel (approximately TWD 2,600).

Treasury Secretary Scott Bessent's revelation that the US and Iran might soon reach a deal ensuring free passage of vessels through the Strait of Hormuz triggered a more than 7% weekly plunge in international oil prices. However, as both sides adopted harder-line stances, expectations for an imminent agreement have cooled significantly.

Iran laid out even more stringent conditions for reopening the strait, including war reparations, sanctions relief, and cessation of military threats. Foreign Minister Abbas Araghchi ruled out direct negotiations with Washington at this stage, accusing the US of violating a temporary peace agreement reached in June.

The US SPR fell to 298.7 million barrels last week, the lowest level since January 1983. The release was part of a coordinated effort by International Energy Agency (IEA) member nations to collectively release 400 million barrels of crude to support global markets.