Crude oil prices settled slightly higher on Tuesday, reaching their highest levels in more than three weeks as concerns over the future of the Strait of Hormuz and fading hopes for a near-term U.S.-Iran agreement continued to support prices. Brent crude settled up $0.15, or 0.17%, at $91.02 per barrel, while WTI gained $0.44, or 0.52%, to settle at $84.94 per barrel. Both benchmarks closed at their highest levels since July 24.
Market gains were limited as some oil continued to move through the Strait of Hormuz despite severely reduced vessel traffic. Saudi Aramco has resumed some oil loadings from inside the strait and is using ship-to-ship transfers near Fujairah in the UAE to maintain exports. Chinese shipping companies have also begun collecting crude cargoes outside the Gulf, helping ease some immediate supply concerns.
Despite these alternative flows, traffic through the Strait of Hormuz remains extremely limited, with daily crossings still in the single digits. The waterway normally carries roughly one-fifth of global oil and liquefied natural gas supplies, leaving the market highly sensitive to any further disruption.
Hopes for a diplomatic resolution weakened after Iran said the Strait of Hormuz would remain closed until the United States meets conditions associated with an interim agreement reached in June. The United States, meanwhile, ruled out extending the ceasefire and said no talks with Iran were currently taking place or scheduled. Iran has also indicated that it could adopt a more offensive military posture if diplomatic efforts fail.
Additional geopolitical risks emerged across the region as Yemen’s Houthi forces reported attacks on vessels in the Red Sea, while a commercial vessel transiting out of the Strait of Hormuz was reportedly struck by a projectile, causing damage and a crew casualty. The UAE also reported detecting two ballistic missiles launched from Iran.
Supply concerns extended beyond the Middle East, as Russia moved to reroute some Kazakh crude exports from the Baltic to the Black Sea. The change could free additional Baltic capacity for Russian crude exports while ongoing Ukrainian attacks continue to complicate tanker availability and Black Sea shipments.