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Attacks on ships in the Middle East have cast doubt on the success of talks to reopen the Strait of Hormuz, and this has had an impact on global markets, with fuel prices rising sharply.
On Wednesday (August 12), the price of Brent crude in the international market rose by more than 2 percent to near $90 per barrel.
It is reported that the price of Brent crude for delivery in October stood at $89.61, about 24 percent higher than before the US-Israeli war on Iran began in late February.
Tim Waterer, chief market analyst at Sydney-based Australian firm KCM Trade, said the market has not yet completely given up hope for a deal, but it is clear that people’s confidence is waning.
Waterer added that the longer the talks drag on without visible progress and the more complex the demands, the more doubts will grow about reaching a workable agreement quickly. The optimism that was there at the beginning of the month is gradually shifting to a more cautious and risk-averse stance.
Before the war, about a fifth of global oil supplies passed through the Strait of Hormuz. Oil prices have been rising over the past week on mixed signals about the possibility of a deal to reopen it.
Qatar’s Foreign Ministry said on Tuesday that talks between Oman and Iran over the Strait of Hormuz were in the final stages, with Doha seeking to open the waterway “as soon as possible.”
Tehran, on the other hand, has said it sees its talks with Oman as separate from the issue of reopening the strait, which Iranian officials claim will remain closed until the United States agrees to certain conditions, such as paying war reparations and lifting the blockade.
On Tuesday, US President Donald Trump claimed that Washington has full control over the strait, even though the level of shipping traffic there is now negligible compared to before the war.
According to data from maritime intelligence agency Windward, only 10 ships passed through this vital waterway last Monday, where an average of about 130 ships used to sail daily before the war.
In its latest market forecast released on Tuesday, the US Energy Information Administration said it did not see any chance of Middle East oil production returning to pre-war levels before early 2027. In addition, Brent crude prices could average $87 per barrel in 2026.
Jun Goh, senior oil market analyst at Singapore-based Sparta Commodities, said OPEC’s crude production can only increase if normal traffic in both directions of the Strait of Hormuz resumes.
He also said that unless there is a new ray of hope in diplomatic talks, oil prices will basically remain at the level of $85 to $90 per barrel, because so far there has been no significant progress in these talks.
Source: Al Jazeera