Oil prices hold near one-week high as Strait of Hormuz reopening remains in limbo

Oil prices settled close to a one-week peak on Tuesday as chances of a US-Iran deal to halt their conflict and reopen the Strait of Hormuz dimmed. WTI crude rose 0.09% to $82.22 per barrel, while Brent crude gained 0.05% to $87.80 per barrel. Earlier, both benchmarks surged over 5%, hitting their highest levels since July 31. The increase followed US President Donald Trump's demand that Iran compensate the US for casualties in wars, attacks, and protests before a deal could be reached.Trump later stated that the US controlled the Strait of Hormuz, having cleared it of Iranian mines.

These new demands have complicated any agreement to reopen the crucial oil route. Oil prices plunged over 7% last week as hopes rose that Iran and Oman were nearing a deal that could lead to the strait's reopening.The waterway transports a fifth of the world's oil and liquefied natural gas before the Middle Eastern conflict started in late February.

Iran insists the US must lift sanctions and meet other conditions before the Strait of Hormuz can reopen. Iran's foreign ministry spokesperson, Esmaeil Baghaei, said on Monday the strait would stay closed until the US lifted its naval blockade, blaming the closure on US and Israeli military aggression. He urged Washington to cease its "destructive actions" so negotiations could begin.

Iran and Oman are currently holding talks on maritime transit, but no direct US-Iran negotiations are underway. Iranian Foreign Minister Seyed Abbas Araghchi said there were no active talks with the US, stating that discussions could not resume until Washington ended its violations of the Memorandum of Understanding and addressed past breaches.

He noted that while an agreement with Oman could be reached, the strait's reopening depends on several conditions. Geopolitical tensions continue to fuel volatility in oil prices, even as they climb higher than during the conflict's earlier stages.