West Texas Intermediate (WTI) US Oil rises 3.20% on Monday and trades around $78.80 at the time of writing.
Oil prices retain strong daily gains, supported by uncertainty surrounding the reopening of the Strait of Hormuz and persistent tensions in the Middle East
The Strait of Hormuz remains at the center of market attention due to its strategic importance for global energy supplies. Around 20% of global energy supply passes through the waterway, making the Oil market particularly sensitive to the risk of prolonged disruptions to shipping. Iran has reiterated several conditions before agreeing to fully reopen the strait.
According to Al Jazeera, Mohammad Bagher Zolghadr, Secretary of Iran’s Supreme National Security Council, demanded, among other conditions, an end to the US naval blockade and the withdrawal of US naval and air forces from around Iran. Tehran is also demanding compensation for damage caused by recent conflicts, the lifting of sanctions and the unconditional release of frozen Iranian assets. These demands currently reduce visibility over a rapid normalization of shipping and help maintain a risk premium in WTI prices.