Market does not believe in quick opening of the Strait of Hormuz: oil continues to rise in price

Oil prices continued to rise for the sixth day in a row as market participants doubt a quick agreement on restoring energy supplies through the Strait of Hormuz.

Brent oil futures on August 12 traded near $90 per barrel. Over the previous five trading sessions, the benchmark grade rose in price by about 12%.

Quotes remain very sensitive to news about negotiations regarding the Strait of Hormuz. Prices change depending on whether statements by the parties suggest an approaching agreement or, on the contrary, a halt in the negotiation process.

Additional uncertainty was created by the words of US President Donald Trump. He stated that the United States fully controls the strait, but does not trust Iran. Prior to that, the US President made new demands of Tehran, while Iran insists on receiving reparations for the damage caused during the five-month war.

At the same time, the Defense Minister of Pakistan reported that the US and Iran have allegedly approached a certain understanding about the strait. Negotiations between Iran and Oman have also reached an advanced stage, a spokesman for Qatar's Ministry of Foreign Affairs stated.

Despite these signals, investors are not yet confident that the sides will be able to quickly restore normal tanker traffic. It is the risk of further supply disruptions that keeps oil prices near the highest levels in recent times.

The day before, Brent was trading around $88 per barrel, and the market was assessing Trump's new demands to Iran. Since then, oil has continued to rise in price, and uncertainty over the Strait of Hormuz has persisted.

Based on materials from: Bloomberg