HOUSTON — Oil prices steadied near more than one-week highs on Tuesday after gaining about 5% in the previous session as fading prospects for a U.S.-Iran agreement raised concerns that the Strait of Hormuz would remain restricted, threatening energy flows through the strategic waterway.
Brent crude futures were flat at $87.81 a barrel by 0013 GMT, while U.S. West Texas Intermediate crude futures held at $82.20. Both benchmarks had risen more than 5% on Monday to their highest levels since July 31.
The price gains followed a deterioration in expectations for a deal between Washington and Tehran aimed at ending their conflict and reopening the strait. Iran has said the United States must lift sanctions and meet other conditions, including compensation and an end to military threats, before the waterway can be reopened. Iranian Foreign Minister Abbas Araqchi said on Sunday that Tehran and Washington were not currently engaged in talks.
U.S. President Donald Trump has separately demanded that Iran pay compensation for deaths and damage linked to wars, attacks and protests. Trump later said the United States had control of the Strait of Hormuz and that U.S. forces had conducted operations to clear Iranian mines, adding uncertainty over the status of shipping through the waterway.
The Strait of Hormuz is a critical route for global energy supplies. Before the conflict began, about one-fifth of the world's oil and liquefied natural gas moved through the waterway, according to Reuters reporting. Barclays analysts said crude oil and refined-product net exports through the strait averaged about 3 million barrels per day in the week ended Aug. 7, down from 4.4 million barrels per day a week earlier.
Regional supply risks have also remained elevated. Saudi Aramco postponed the restart of its 400,000-barrel-per-day Jazan refinery to Aug. 30 after Yemen's Houthis claimed two attacks on the facility on Sunday.
Tim Waterer, chief market analyst at KCM Trade, said the gap between U.S. and Iranian positions was undermining optimism that had supported oil prices the previous week. He said continued risks around the Strait of Hormuz and Bab el-Mandeb were keeping insurance costs elevated and shipping routes longer.
For now, oil markets remain focused on developments affecting negotiations and the reopening of the Strait of Hormuz, with both benchmarks holding near their highest levels in more than a week.
