Oil prices reach $90 a barrel as hopes weaken for US-Iran deal

Oil prices surged to $90 a barrel on Tuesday as the chances of a US-Iran deal faded and the Strait of Hormuz reopened, following US President Donald Trump's demand for Iran to compensate for past conflicts. Brent, the global benchmark, climbed 2.6% to $90 a barrel, while West Texas Intermediate rose 2.98% to $84.58 a barrel. This marked the highest level in over a week, driven by Trump's insistence on compensation for Iran's "killings and gravely wounded" in various conflicts, including the USS Cole bombing and the 52,000 deaths in the past five months.

Iran demanded six new conditions for reopening the Strait, including lifting the maritime blockade and withdrawing US forces. Research analyst Soojin Kim from MUFG noted that the toughening of US and Iranian demands, combined with tight global inventories and security risks on alternative shipping routes, kept a geopolitical premium in oil prices.

As of Tuesday, traffic through Hormuz was still limited to about five vessels per day, threatening global energy flows and raising concerns about supply issues extending to the Red Sea, where Houthi attacks have disrupted shipping and delayed Saudi Arabia's Jazan refinery restart.