DTN Oil Update
Oil Dips as Iran, Oman Advance Talks on Strait of Hormuz
SECAUCUS, N.J. (DTN) -- Crude futures dipped Tuesday morning following media reports that negotiations over the Strait of Hormuz between Iran and Oman have reached an advanced stage.
By 9:25 a.m. EDT, NYMEX WTI crude for September delivery was down $0.30, or 0.4%, to $81.83 bbl. ICE Brent crude for October slid $0.44, or 0.5%, at $87.28 bbl.
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Among refined products, NYMEX ULSD for September delivery fell $0.0567, or 1.4%, at $4.1331 gallon. NYMEX RBOB for September retreated by $0.0282, or 0.9%, to $3.1072 gallon.
The U.S. Dollar Index eased 0.008 points to 99.695 against a basket of currencies.
The modest pullback came after both Brent and WTI crude contracts surged more than 5% on Monday, Aug. 10. That rally was driven by escalating rhetoric as U.S. President Donald Trump demanded financial compensation from Iran, while Tehran countered with demands for reparations and the complete removal of sanctions before reopening the waterway.
Market participants remain concerned that prolonged supply disruptions through the key transit route could reignite inflationary pressures and prompt further monetary tightening by the Federal Reserve.
Conflicting narratives regarding shipping conditions persist, with Washington asserting the channel is open while Tehran claims it remains blocked by mines and drones. The elevated geopolitical tensions have unwound optimism from late last week when preliminary reports of a potential agreement sent energy prices sharply lower.
Qatar's Foreign Ministry assuaged some of those concerns by reporting Tuesday that an imminent Iran-Oman deal on the Hormuz could lay the foundation at least for the reopening of the Hormuz, pending U.S. cooperation.
Despite the ongoing standoff over the waterway, ship tracking data reported by media indicated that four commercial vessels, including two clean product tankers, traversed the strait on Monday.