Oil markets are on edge as Iran insists it will not reopen the Strait of Hormuz — the narrow waterway linking the Persian Gulf to the open ocean, through which roughly one-fifth of global oil supplies once flowed — until the United States meets a sweeping list of conditions. Brent crude, the international benchmark, rose more than one percent on Monday to around $84.43 a barrel, up approximately 16 percent compared with levels before the conflict began in late February, when US and Israeli strikes on Iran triggered the crisis that has become the largest energy disruption in recorded history.
Iran's Supreme National Security Council laid out its demands on Saturday: a permanent end to hostilities on all fronts, the lifting of a US naval blockade of Iranian ports, the removal of US forces from the region, an end to sanctions, the unconditional release of frozen Iranian assets, and full compensation for wartime damage. Iranian Foreign Minister Abbas Araghchi confirmed that discussions with neighbouring Oman — which shares sovereignty over the strait's waters — were in their "final stages" regarding new shipping lane arrangements, but stressed that this alone would not mean the waterway would reopen. Messages are being exchanged between Tehran and Washington through intermediaries, Araghchi said, but Iran considers these exchanges distinct from formal negotiations, which it says cannot resume while the US remains in breach of an interim deal signed in June.
US President Donald Trump struck a markedly different tone, telling Axios on Sunday that his administration was "low-keying it" and "only semi-negotiating" with Iran, expressing confidence that economic pressure on Tehran would eventually force a resolution. Iran's economy is itself under severe strain: oil exports have largely collapsed since the US reimposed its naval blockade on 4 July, and the state depends on those revenues to fund both its military and domestic security apparatus. Analysts note that Iran's maximalist posture may reflect the need to satisfy a hardline domestic base as much as strategic confidence — and that control of the strait remains Tehran's most powerful deterrent, particularly if US forces were to reduce their regional presence.
Shipping through the strait has been drastically curtailed, with vessel-tracking data showing between eight and 15 transits on recent days, compared with roughly 130 before the conflict. At least 64 violent incidents and 17 deaths involving commercial vessels have been recorded since the war began, and the UAE condemned Iran on Saturday over what it described as a missile strike on a tanker owned by the Abu Dhabi National Oil Company. Meanwhile, Iran's Houthi allies in Yemen have declared a parallel maritime blockade of Saudi ports on the Red Sea, further complicating regional energy flows, and Houthi strikes on Yemen's Mocha port killed seven people on Sunday.
Market analysts caution that even a diplomatic breakthrough may not immediately calm oil prices. "Even if an agreement is eventually announced, history suggests these understandings can prove fragile," said Tim Waterer, chief market analyst at Sydney-based KCM Trade. "That residual risk of reversal would likely limit how far oil prices could fall in the event of a diplomatic breakthrough." Despite the energy market turbulence, Asian stock markets rose on Monday, buoyed by Friday's record highs on Wall Street, which were driven by weaker US jobs data reducing expectations of interest rate increases.