Noida, July 21 (APAC Media): Brent crude prices slipped towards $88 a barrel on Tuesday, easing slightly from a five-week peak as renewed optimism over a possible revival of US-Iran peace negotiations helped temper fears of a further escalation in geopolitical tensions.
Crude oil futures were trading at 82.491, up 0.011 points, or 0.01%, during the session. The commodity has gained 11.66% over the past month and 26.28% on an annual basis, according to market data recorded at 12:42.
Brent crude was quoted at 88.915, down 0.305 points, or 0.34%, on the day. Despite the decline, the global benchmark has advanced 14.11% over the month and 29.60% over the year.
According to the report, Iranian authorities will not allow vessels to pass through the strategic waterway, a major global shipping corridor for energy and commercial traffic.
“The Strait of Hormuz is under the full control of the Iranian armed forces,” said Iran’s semi-official Fars news agency. The report added that any decision on reopening the passage or extending the restrictions would be determined by security considerations and Iran’s national interests.
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The reported statement said the measures would remain in effect for as long as Iran considers US actions to pose a threat to its security.
Market participants remained cautious as diplomatic efforts intensified on Monday to broker a fresh ceasefire between Washington and Tehran, with reports suggesting the possibility of a 10-day truce.
However, oil prices have continued to post strong gains this month as US strikes on Iran entered a tenth consecutive day, while Tehran maintained retaliatory attacks against neighbouring countries.
However, tensions intensified after US President Donald Trump warned that Tehran would be held responsible for the deaths of three American service members.
Market concerns were further heightened after Iran-backed Houthi militants announced a maritime embargo targeting Saudi Arabia, raising fears of potential disruptions to energy shipments through the Red Sea.
Traders have avoided taking significant positions amid rapidly changing geopolitical developments, leaving crude markets highly volatile as investors balance prospects of renewed diplomacy against the risk of supply disruptions.
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Reports of a potential ceasefire agreement between Washington and Tehran briefly pressured prices lower during Monday’s trading session. However, crude prices recovered after the Houthis announced the maritime restrictions on Saudi-linked shipping.
“Vessels would have to take the much longer route through the Suez Canal and around Africa. It remains uncertain how effective any blockade will be, but the development will clearly increase insurance costs,” analysts said in a note.
The move has raised concerns over traffic through the Bab al-Mandeb Strait, a key maritime chokepoint connecting the Red Sea with the Gulf of Aden. The route handles around 12% of global trade and carries substantial volumes of oil shipments.
Analysts noted that any prolonged disruption could force vessels to take longer alternative routes through the Suez Canal and around Africa, increasing shipping costs and insurance premiums.
News Agency Inputs
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