Oil prices jumped 5% on Monday, driven by market worries over the different conditions set by the US and Iran to unlock the Strait of Hormuz.
Oil prices soared 5% on Monday, driven by market worries over the different conditions set by the United States and Iran to unblock the Strait of Hormuz.
The benchmark Brent crude from the North Sea rose 4.99% to $87.72 a barrel. Its American counterpart, West Texas Intermediate, gained 5.05% to $82.13 a barrel.
President Donald Trump said on Monday that the United States would seek ‘compensation’ for attacks carried out by Iran for decades against foreign adversaries or against protesters at home.This is a response to a long-standing demand from the Iranian authorities, who are making any deal on the Strait of Hormuz conditional on the payment of American reparations.
But this new announcement makes a quick agreement on the Strait of Hormuz even less likely, as Iran is insisting that Washington accept “all” of its conditions.
“Many of these demands are clearly unacceptable to the United States” because they “make it hard for Trump to exit the conflict without seeming to have lost the war,” says Arne Lohmann Rasmussen, an analyst at Global Risk Management.The market, which was still betting last week on an agreement between the two warring sides, is now worried about the diplomatic deadlock.
Iranian foreign ministry spokesperson Esmaïl Baghaï reiterated on Monday the message Tehran has been sending for the past few days: there is no ‘direct negotiation’ underway with Washington.
U.S. bombings have stopped for over a week, but ‘the U.S. Navy continues to block Iranian ports in the region, and President Trump has stated that economic pressures on Iran will continue,’ notes David Morrison, analyst at Trade Nation.
In this context, even the progress Tehran claims to have made with Oman to map out a future passage route through the Strait of Hormuz no longer reassures investors.European gas – often more volatile than oil – shot up even more, fueled by strong worries about restocking in Europe before winter. The Dutch TTF futures contract, considered the European gas benchmark, rose 10.99% to 61.65 euros per megawatt-hour.
