Oil rises on uncertainty over reopening of Hormuz

Oil prices surged 5 percent on Monday following Iran and the United States' exchange of demands for compensation, causing doubts about a deal to reopen the Strait of Hormuz. Iran insisted the US must lift sanctions on Tehran and meet other conditions before reopening the vital waterway, while US President Donald Trump stated Iran must pay compensation for all people killed or gravely wounded by Iran.

Brent crude futures rose $4.17, or 4.99 percent, to $87.72 a barrel, while US West Texas Intermediate crude futures climbed $3.95, or 5.05 percent, to $82.13. These gains were the steepest since July 29 for both contracts. Both benchmarks dropped more than 7 percent the previous week on hopes that Iran and Oman were near a deal to reopen the strait, which carried a fifth of the world's oil and liquefied natural gas before the Middle East conflict began in late February.

Iran claimed it was nearing a final pact with Oman to define new shipping lanes, but reiterated the US must meet additional conditions, including compensation and cessation of sanctions and military threats, before reopening. Iran and the US are not currently in talks, and Tehran will not initiate them while Washington remains in breach of a June interim deal.

Crude futures gained in early trade due to the delayed US/Iran peace deal, ongoing strikes from Ukraine on Russian refineries and tankers in the Black Sea, and Iranian-aligned Houthis' attack on Saudi Aramco's Jazan refinery, which forced a restart delay until August 30.