As Iran Grows More Aggressive, Brent Holds Above US$90
Oil prices maintained their gains for a third consecutive session on Tuesday (Aug 18) as the likelihood of a peace deal in the Middle East diminished once again. Brent crude rose to around US$91.07 per barrel, while WTI hovered near US$84.99; both benchmarks touched their highest levels since late July.
Market sentiment remained buoyed by President Donald Trump's decision not to extend the interim US-Iran agreement and by escalating security risks in the Strait of Hormuz. Negotiations and efforts to restore tanker traffic through this strategic waterway have yet to show significant progress.
Iran has insisted that the Strait of Hormuz will remain closed until the United States meets specific conditions outlined in the June interim agreement. This statement followed remarks by a senior Iranian official indicating that Tehran would shift to a more offensive military posture due to the deadlock in efforts to achieve permanent peace.
Nevertheless, limited volumes of oil are still managing to exit the Hormuz region. Saudi Aramco has resumed oil loading from within the strait and is offering cargoes via ship-to-ship transfers near Fujairah, United Arab Emirates. These flows have helped temper market fears regarding a total supply stoppage.
Regional tensions have also widened after Yemen's Houthi group claimed to have launched missile attacks on a vessel identified as a Saudi military ship—along with its escorts—in the Red Sea. Meanwhile, negotiations between Iran and Oman regarding the management of the Strait of Hormuz remain a focal point, particularly after Trump previously issued threats against Oman.
Newsmaker Analysis: As long as Iran maintains a hardline stance and shipping through Hormuz remains restricted, the geopolitical risk premium is likely to keep Brent prices above US$90. Should attacks on vessels escalate or oil flows face further disruption, the rally could continue. Conversely, increased exports from the Gulf or diplomatic breakthroughs could trigger profit-taking following the gains seen in recent sessions. (arl)
Source: Newsmaker.id
