Oil Prices Surge as Iran Keeps Strait of Hormuz Closed

Global oil prices rose approximately 3% on Monday, with Brent crude reaching nearly $87 per barrel and WTI hitting $80.61. The Government of Iran has closed the Strait of Hormuz, demanding that the United States lift sanctions, end military threats, and pay reparations before reopening the strategic waterway. Iranian Foreign Minister Abbas Araghchi stated that talks with Washington will not resume while the U.S. is in breach of a June interim deal, and the promotion of hard-liner Mohsen Rezaee to a top security post signals a firm stance on maintaining control of the strait.

Energy supplies face additional pressure from multiple conflict zones. In Saudi Arabia, Houthi militants claimed responsibility for attacks on Saudi Aramco's Jazan refinery, causing a fire in a crude storage tank and delaying the restart of the 400,000-barrel-per-day facility until August 30. Simultaneously, Ukrainian forces struck Russian energy infrastructure, including the Taneco oil refinery in Tatarstan and the ZapSibNeftekhim petrochemical plant in Tyumen.

These disruptions have severely impacted fuel markets. European diesel futures surged over 10% and natural gas futures rose 12%, while Northwest European gasoline refining margins climbed to $35.52 per barrel. The Abu Dhabi National Oil Company reported that 15 of its vessels have been attacked in the Strait of Hormuz since February. In response to the volatility, President Donald Trump indicated the U.S. is taking a low-key approach to negotiations.