Oil pushed higher as Iran and the US appeared far apart on a new ceasefire deal for the reopening of the Strait of Hormuz, with Tehran saying it’s sticking to a proposal that US President Donald Trump has rejected.
Still, key gauges of supply tightness have spiked in recent days, a sign of a clamor for barrels that can be delivered quickly, while fuel prices are surging as global refinery capacity remains hobbled. Diesel has also been pushed higher by the Russia-Ukraine war, while uncertainty has continued to mount over US measures to curb record prices for the fuel. On the diplomatic front, the path back to talks remains uncertain. The agreement would have been similar to the memorandum of understanding reached in mid-June, which led to a fragile ceasefire before collapsing.
Brent was near $108 a barrel, climbing more than 3%, after discussions between the two sides appeared to hit fresh snags. Brent is up over 75% this year and oil products continue to soar even higher.
The conditions Iran wants are something Washington might have agreed to about a year ago, but Tehran has now overplayed its hand, Trump told Axios in an interview. Even so, the president expects negotiations to resume this week, according to the report. Prices pared some gains after Saudi Arabia was said to have started exporting oil using a key cross-country pipeline after the link was repaired following drone strikes earlier this month. “In the absence of a decisive end to the conflict in the Middle East, the balance of risks remains skewed towards higher oil prices,” said Hamad Hussain, senior climate and commodities economist at Capital Economics. Over the weekend, Trump said the White House was looking at curbs on diesel exports “very seriously. Negotiators were said to have explored a deal to reopen the waterway and for Washington to lift a blockade of Iranian ports.
