Oil Continues to Rise Amid Uncertainty Around the Strait of Hormuz

Oil prices are rising for the fourth day in a row amid contradictory statements from the United States and Iran about whether the Strait of Hormuz is open for shipping.

Brent crude futures rose by 69 cents, or 0,8%, to 91,71 dollars per barrel. The price of West Texas Intermediate (WTI) crude futures increased by 76 cents, or 0,9%, to 85,70 dollars per barrel. Trading for both benchmarks on the previous session on Tuesday, 18 August, ended at the highest level in more than three weeks amid worsening prospects for a peaceful agreement between the United States and Iran. “Risks to shipping are rising again as attacks by Iran and the Houthis remain widespread at both key chokepoints, supporting oil prices in the near term,” said Jun Go, a senior market analyst at Sparta Commodities, referring to the Strait of Hormuz and the Bab el-Mandeb Strait. According to data released today, ship movements through the Strait of Hormuz have slowed as most shipowners avoided this important waterway due to a lack of clear signals about its reopening after the blockade. To bypass the Strait of Hormuz, the Iraqi government approved mechanisms for exporting Iraqi crude oil through specialized international and local companies, as well as through a range of export markets.

The situation around the Strait of Hormuz. For reference, recently U.S. President Donald Trump once again shared plans to declare the Strait of Hormuz as U.S. territory. He also spoke about the current state of navigation through it. At the same time, Iran stated that the Strait of Hormuz will not be reopened until the United States fully fulfils all the conditions of the Islamabad Memorandum of Understanding. In addition, Iran is preparing for a possible escalation not only in the Strait of Hormuz area but also in the wider region.