Oil rises as Iran tempers hopes for swift Hormuz reopening

Oil prices surged nearly 5% on Monday after Iran and the United States clashed over compensation demands, casting doubt on a deal to reopen the Strait of Hormuz. Iran demanded that the U.S. lift sanctions and meet several other conditions before reopening the vital waterway, while President Donald Trump insisted Iran must pay compensation for all lives lost or severely harmed.

Brent crude futures climbed $4.17, or 4.99%, to $87.72 per barrel, and U.S. West Texas Intermediate crude futures rose $3.95, or 5.05%, to $82.13. Both benchmarks marked the steepest gains since July 29. In July, hopes had been high that Iran and Oman were nearing an agreement to reopen the strait, which transports about a fifth of global oil and liquefied natural gas.

However, Iran maintained that a final pact with Oman was imminent but reiterated that the U.S. needed to fulfill additional demands, including compensation and an end to sanctions and military threats. Iran and the U.S. are not currently engaged in talks, and Tehran has ruled out initiating discussions while Washington remains in breach of a June interim deal.

Analysts noted that the heightened tensions and potential supply disruptions could keep near-term oil prices elevated despite longer-term uncertainties.