Oil rises amid Trump's statements on Iran and Strait of Hormuz

Oil prices rose on the morning of August 4 after the biggest weekly drop. The market is reacting to contradictory statements from the US and Iran regarding negotiations and a possible resumption of shipping through the Strait of Hormuz.

Brent crude futures were trading near $85 per barrel, while US WTI oil cost over $81. A day earlier, Brent fell almost 5%, and WTI more than 5% after US President Donald Trump cancelled a planned strike on Iran and announced a new attempt at a diplomatic settlement.

Trump called the proposed talks a "last chance" for Tehran. According to him, the parties are discussing the opening of the Strait of Hormuz, and full vessel traffic through the key maritime route may resume soon.

Meanwhile, Iran denies any direct negotiations with the United States. Tehran stated that consultations are only being held with Oman and relate to creating a temporary safe passage for vessels.

The Strait of Hormuz is used to transport oil, liquefied natural gas and other goods from Persian Gulf countries. Vessel movement remains significantly limited, so any signs of the route's opening reduce the risk of a deficit and put pressure on prices. At the same time, new attacks or failed negotiations could sharply drive prices up again.

Additional pressure on the oil market is created by OPEC+ plans to increase production by 188,000 barrels per day in September. However, the situation around Iran and the Strait of Hormuz remains the main driver for prices for now.

Based on materials from: Bloomberg, The Wall Street Journal,  Associated Press