Oil Prices Rise as Iran Sets Conditions for Reopening Strait of Hormuz

Global oil prices rose on Sunday and Monday as Iran detailed a list of demands for the reopening of the Strait of Hormuz. Brent crude, the international benchmark, rose to approximately 84.42 to 84.58 US dollars per barrel. The waterway, which typically handles about one fifth of the world's oil and liquefied natural gas, has seen shipping effectively collapse since the conflict between the United States, Israel, and Iran began in late February.

Iranian Foreign Minister Abbas Araghchi stated that an agreement with Oman to establish new shipping routes is in its final stages. However, he and Mohammad Bagher Zolghadr, secretary of the Supreme National Security Council, emphasized that the strait will not reopen until the United States meets several conditions. These demands include the lifting of sanctions and naval blockades, the withdrawal of US military forces from the vicinity of Iran, the release of frozen assets, and the payment of war reparations. Iran also demanded an end to attacks against itself and its allies in Lebanon, Palestine, Yemen, and Iraq.

President Donald Trump stated that Washington is negotiating with Tehran discreetly. A US official noted that the US would lift the blockade on Iranian ports once an agreement to restore unimpeded commercial shipping is announced, though this remains conditional on Iran meeting its commitments. Meanwhile, Israeli Prime Minister Binyamin Netanyahu asserted that he will prevent Iran from obtaining nuclear weapons regardless of diplomatic negotiations.

Regional instability has increased with reports of attacks on energy infrastructure. The United Arab Emirates condemned a missile attack by Iran on a tanker belonging to the Abu Dhabi National Oil Company. Additionally, Houthi rebels in Yemen, who are aligned with Tehran, claimed to have attacked the Saudi Aramco refinery in Jazan on the Red Sea coast. The Saudi Ministry of Energy confirmed a fire occurred at the facility, which was later extinguished without injuries.

Market analysts suggest that the lack of concrete progress and the fragility of potential agreements are maintaining a risk premium in oil prices. Despite the volatility in energy markets, some Asian stock indices saw gains on Monday following strong US stock performance on Friday.