Oil price extends gains as Hormuz uncertainty keeps energy markets cautious
OIL prices extended their gains for a third consecutive session on Monday as uncertainty over the reopening of the Strait of Hormuz continued to heighten concerns over global energy supplies. Brent crude rose above US$84 a barrel, while West Texas In...
Oil prices continued to rise for the third straight day on Monday, buoyed by uncertainty surrounding the reopening of the Strait of Hormuz. Brent crude surpassed US$84 per barrel, while West Texas Intermediate (WTI) settled around US$76.40, following a nearly 4% surge in the prior session. Market focus remained on the strategic waterway, after Iran reported progress in talks with Oman regarding a new shipping route through the Strait, though Tehran indicated the deal may not immediately restore access.
Iran has also ruled out negotiations with the United States for now, citing alleged breaches of a June interim peace agreement. Tehran insists on ending the U.S. naval blockade, lifting sanctions, and receiving compensation for war damage before agreeing to reopen the vital shipping passage. Meanwhile, U.S. President Donald Trump has taken a measured stance as pressure mounts on Washington to reach a deal with Tehran.
Regional tensions further clouded energy market sentiment, with Iran-backed Houthi militants reportedly attacking Saudi Arabia's Jazan refinery and a tanker operated by Abu Dhabi National Oil Co. in the Strait of Hormuz over the weekend. These incidents have intensified concerns over the security of a critical energy corridor, through which significant global oil and gas shipments typically transit.
The U.S. dollar index declined slightly to around 99.6 on Monday, after a sharp drop the previous day, as weaker-than-expected U.S. employment data increased expectations of a Federal Reserve rate cut. The U.S. non-farm payrolls unexpectedly fell by 23,000 in July, with revisions to earlier months indicating a worsening labor market.
Investors now see a 44% chance of a 25-basis-point rate cut in September, down from 67% a week earlier, as they await key U.S. inflation data for further insights into the Federal Reserve's monetary policy direction. Meanwhile, financial markets remain vigilant, monitoring developments in the Middle East following Iran's denial of direct talks with Washington, despite U.S. claims of an imminent agreement.
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