Oil prices increased on Thursday amid uncertainty surrounding the Iran-Oman negotiations and their potential impact on oil flows through the Strait of Hormuz. Additionally, concerns were raised following reports of attacks on Saudi tankers in the Red Sea and Gulf of Aden, heightening supply tensions.
Brent crude futures rose by 0.60 percent, or 48 cents, reaching $79.93 per barrel by 0755 GMT. Similarly, US West Texas Intermediate futures saw a gain of 0.39 percent, adding 29 cents to reach $75.51 a barrel.
Market analysts like Tim Waterer from KCM Trade highlighted the previous Memorandum of Understanding signed in June, leading to apprehension about the fragility of any potential new agreements.
Iran and Oman have reportedly agreed on the geographic coordinates for a shipping route in the Strait of Hormuz, pending an official joint announcement to avoid interference from third parties, as stated by Iran’s Foreign Ministry spokesperson Esmaeil Baghaei.
There were discussions about a proposed deal between Iran and Oman to ease tensions between the US and Iran, which could grant Tehran authority over vessels entering the Gulf through the Strait of Hormuz, representing a significant concession by Iran.
Prior to the conflict that erupted in late February, the daily oil and liquefied natural gas supplies passing through the Strait of Hormuz accounted for approximately one-fifth of global totals.
Market experts emphasized the necessity for sustained and verifiable increases in oil volumes to alleviate concerns over supply risks.
Shipping data revealed that crude oil and condensate exports from Gulf countries remained relatively stable in July, marking a 40 percent decrease from pre-war levels.
Iran issued warnings to Gulf nations, cautioning against new US attacks on its territory, which could result in retaliatory actions targeting critical energy infrastructure in the region, escalating tensions further.
Yemen’s Houthis, aligned with Iran, claimed responsibility for missile attacks on Saudi oil tankers in the Red Sea off Yanbu and in the Gulf of Aden. Saudi Arabia did not confirm these incidents.
Meanwhile, Saudi Arabia adjusted the September Arab Light crude oil official selling price to Asia, setting it at $2 below the Oman/Dubai average, showcasing a decrease compared to the previous month.
In a separate development, Ukraine’s President Volodymyr Zelenskiy announced that the Ukrainian military targeted two oil refineries deep within Russia.