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Oil prices rose in early trading on Monday as market participants weighed mixed signals from the US and Iran, with concerns that a deal to reopen the Strait of Hormuz could take longer to materialise.
Futures for international benchmark Brent crude for October delivery gained 1.04% to $84.42 a barrel, while US West Texas Intermediate futures for September advanced 0.83% to $78.83 a barrel.
Iran’s Revolutionary Guards insisted on Sunday that they would not reopen the Strait of Hormuz until the US complied with a list of demands.
Tehran insists on retaining control of the waterway – through which a fifth of world oil and LNG pass – after the war and wants to charge tolls for passage, which Washington has pushed back against.
Attacks in the strait, which was free to transit before the war, led to the collapse of an April ceasefire, and mediators have urged both sides to return to the terms of a subsequent June memorandum that set out a path for peace talks.
Iran on Saturday released a list of conditions for reopening the strait, including an end to the war on all fronts, the lifting of a US counterblockade of Iranian ports, the end of sanctions, the release of frozen assets and compensation for wartime damage, the Tasnim news agency reported.
Those conditions echoed the terms of the June agreement, which included a provision to create a $300 billion reconstruction fund for Iran.
Iran’s Revolutionary Guards said on Sunday that their strategy was to maintain their blockade “until the enemy accepts all our conditions… the strait is now actually a theatre of war for us and not just a waterway”.
For his part, US President Donald Trump said in an interview: “We are low-keying it.”
“We are only semi-negotiating with them,” he was quoted as saying. “We are just watching Iran with its huge inflation and the fact they have no money.”
“It will work out,” he added. “It’s like a chess game.”
Additional sources • AFP