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

Oil prices surged to $90 a barrel on Tuesday as expectations faded for a US-Iran deal and the Strait of Hormuz reopened. Brent, a key benchmark, climbed 2.6% to $90 a barrel, while US crude West Texas Intermediate gained 2.98% to $84.58 a barrel. The spike occurred after President Donald Trump demanded Tehran compensate the United States for past conflicts, including those involving the USS Cole and other combat-related deaths.

Iran responded with six new conditions to reopen Hormuz, such as lifting a maritime blockade and withdrawing US naval forces. Research analyst Soojin Kim of MUFG explained that tougher US and Iranian demands have reduced the likelihood of a near-term agreement to restore normal shipping through the strategic chokepoint. Kim noted that with diplomatic positions hardening, tight global inventories, and security risks on alternative export routes, the ongoing Hormuz disruption is likely to maintain a significant geopolitical premium in oil prices.

Currently, only about five vessels per day manage to pass through Hormuz, leaving a substantial portion of global energy flows at risk. Additionally, the Red Sea has faced Houthi attacks, causing disruptions to shipping and delaying the restart of Saudi Arabia's Jazan refinery.