Oil rises as uncertainty continues over reopening of Strait

Oil prices surged 5 percent on Monday as tensions between Iran and the United States loomed over the reopening of the Strait of Hormuz. Iran and Washington traded demands for compensation, making a deal to reopen the vital waterway seem increasingly unlikely. Iran demanded the U.S. lift sanctions and meet other conditions, while President Donald Trump insisted Iran compensate for all deaths and injuries caused by its actions.

Brent crude futures jumped $4.17, or 4.99 percent, to $87.72 a barrel, while U.S. West Texas Intermediate crude rose $3.95, or 5.05 percent, to $82.13 per barrel. These gains marked the steepest since July 29 for both contracts. In contrast, crude prices had fallen over 7 percent last week on hopes of a deal between Iran and Oman to reopen the strait.

Iran claimed it was nearing a final agreement with Oman to define new shipping lanes, but insisted Washington meet additional conditions first. Both nations are not currently in talks, with Iran refusing to start negotiations while the U.S. remains in breach of a June interim deal. Traders remain cautious, anticipating tighter supplies and potential disruptions from ongoing attacks on energy infrastructure in Russia and Saudi Arabia.