Oil prices rise due to threat of protracted crisis in Hormuz

World oil prices continued to rise on August 10 due to the lack of a final agreement between Iran and Oman regarding shipping through the Strait of Hormuz, as well as new attacks on Middle Eastern oil infrastructure.

Brent crude futures were trading above $84 per barrel. According to Al Jazeera, as of 04:30 GMT, October contracts cost $84.43 per barrel, having risen by more than 1%. US West Texas Intermediate was near $79 per barrel.

Over the previous three trading sessions, Brent rose more than 5%. Quotes are supported by fears that energy supplies from the region cannot be quickly restored.

Iranian Foreign Minister Abbas Araghchi said that Tehran and Muscat have come closer to an agreement on creating a route for ship passage through the Strait of Hormuz. At the same time, he warned that even concluding such an agreement would not mean an immediate full opening of the waterway.

Iran demands that the United States fulfill additional conditions, including easing sanctions and compensation for losses incurred during the war. Araghchi also ruled out direct talks with Washington, accusing the US of violating the temporary agreements reached in June.

Before the war began, the Strait of Hormuz ensured the transportation of about one-fifth of the world's oil supply. Due to hostilities, ship traffic has sharply decreased, so the absence of a clear mechanism for its opening continues to hold a geopolitical premium in raw material prices.

US President Donald Trump, meanwhile, signaled that Washington is not yet planning a new large-scale military operation against Iran. He said that the US is reducing the intensity of the confrontation and is watching the increased economic pressure on Tehran.

Additional tension in the oil market was caused by the situation in Saudi Arabia. Yemen's Houthis claimed a drone attack on a Saudi Aramco oil refinery in Jizan near the Red Sea.

The Saudi Ministry of Energy confirmed a fire at the facility and reported that it was extinguished with no casualties. However, the ministry did not name the cause of the fire, and Riyadh did not confirm the Houthis' claim of a successful strike.

The protracted negotiations regarding the Strait of Hormuz and the threat of new attacks on oil industry facilities could further support increased price volatility.

Based on: Bloomberg, Al Jazeera