WASHINGTON, Aug 17 — Oil prices rose today on a lack of progress in diplomatic efforts to resolve the West Asia conflict, though the absence of major supply outages limited gains.
Brent crude futures were up 34 cents, or 0.38 per cent, at US$88.86 a barrel by 1202 GMT after hitting a session high of US$89.68. US West Texas Intermediate crude futures rose 4 cents or 0.05 per cent to US$82.44 a barrel.
Both contracts gained more than 5 per cent last week following attacks on tankers operated by the Abu Dhabi National Oil Company (ADNOC) in the Hormuz strait and on a Saudi Aramco refinery.
But Bjarne Schieldrop at SEB Research said prices are unlikely to move substantially higher unless there is a halt in the current flow of crude out through the Strait of Hormuz at night and/or a closure of the Bab el-Mandeb Strait.
For now, prices were trading close to US$90 as traders weigh the risk of deeper disruption and shortages against the possibility of a resolution where the Strait of Hormuz is reopened and oil prices fall sharply, Schieldrop said.
Over the weekend, Iranian Foreign Minister Abbas Araqchi said Iran had not decided to resume talks with the United States, while US President Donald Trump urged Americans to accept slightly higher gasoline prices while the conflict continues.
Iranian Foreign Ministry spokesperson Esmaeil Baghaei said talks with Oman are continuing and taking a long time due to the complexity of the subject, the involvement of multiple actors and countries seeking to undermine the process.
“Shipping through the Strait of Hormuz remains restricted, and negotiations have reached a stalemate, both of which limit the potential for further decline,” said Frank Walbaum, market analyst at trading platform Naga.com.
“In the absence of new catalysts, oil prices could continue to consolidate around current levels.”
Shipping through the Strait of Hormuz slowed over the weekend, data showed today, following attacks on tankers. Five commodity vessels transited the strait on Saturday, with none registered for yesterday, ship-tracking data from Kpler showed, versus 31 for the prior weekend.
Before US-Israeli attacks on Iran began in late February, the strait handled about one-fifth of global oil and liquefied natural gas supplies.
Meanwhile, ADNOC sold at least 14 million barrels of spot crude to Asian refiners at premiums in its latest tender, trade sources said today.
Saudi Aramco is offering crude oil outside of the Strait of Hormuz to some Asian refiners, two sources with knowledge of the matter said today.
