Oil prices rise over 2% on Tuesday

Oil prices rose more than 2 per cent on Tuesday to their highest levels since July 31 as hopes for a US-Iran deal to end the war and reopen the Strait of Hormuz faded.

Brent crude futures rose $1.92, or 2.19 per cent, to $89.64 a barrel by 0805 GMT, while US West Texas Intermediate (WTI) crude futures gained $1.91, or 2.33 per cent, to $84.04.

Prices extended gains after both benchmarks jumped more than 5 per cent on Monday, following US President Donald Trump’s demands that Iran pay compensation for people killed in wars, attacks and protests, complicating efforts to reopen the strategic waterway.

Traffic through the Strait of Hormuz fell to six vessels on Monday, compared with a 10-day average of around 11 vessels. Crude oil and refined product net exports through the strait averaged 3 million barrels per day (bpd) in the week ending August 7, down from 4.4 million bpd the previous week.

The strait handled around one-fifth of global daily oil and liquefied natural gas supplies before the Iran conflict began in late February.

Meanwhile, Saudi Aramco postponed the restart of its 400,000-bpd Jazan refinery to August 30 after the Houthis claimed two attacks on the facility. Abu Dhabi National Oil Company (ADNOC) also offered spot crude in a tender, its eighth since the start of June, as it works to move oil from inside the Strait of Hormuz.

Attribution: Reuters