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Crude oil prices are rebounding yet again after giving up all the gains they made during the Iran war, after both the US and Iran signed an MoU on the sidelines of the G7 summit in France last month, which included points to end the war and ensure safe passage of commercial vessels through the Strait.
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Crude oil prices rose on Monday, July 13, in early Asian trading after the US and Iran traded fresh round of strikes over the weekend and also offered contrasting versions on the status of the Strait of Hormuz.
Brent Crude is now trading above the $78 a barrel mark for contracts that expire in September. The 3%-plus gains come after the contracts had gained 5.5% last week, while the West Texas Intermediate (WTI) or the US crude variant also traded above the mark of $74 a barrel. European Natural Gas futures also added 2.5% after the weekend break.
Is The Strait of Hormuz Open Or Shut?
While Iran has announced that the Strait, a key waterway, which controls 20% of the global energy supply, will be closed "until further notice", the US Central Command has denied such a claim, stating that forces are prepared to ensure freedom of navigation.
"The Strait of Hormuz is open to all vessels seeking to lawfully transit the international waterway," the Central Command wrote on "X".
The US Central Command also said that it has launched a fresh round of strikes at 5 PM Eastern Time on Sunday to hold Iran accountable for the attacks on commercial vessels in the Strait.
Crude oil prices are rebounding yet again after giving up all the gains they made during the Iran war, after both the US and Iran signed an MoU on the sidelines of the G7 summit in France last month, which included points to end the war and ensure safe passage of commercial vessels through the Strait.
This recent flare up now risks derailing efforts to rebuild the depleted oil inventories later this year, as per the Energy Agency's statement on Friday, before the recent round of attacks.
According to the Joint Maritime Information Center, there was almost no traffic through the strait on Sunday, with only two oil products tankers seen approaching the chokepoint. However, the JMIC went on to add that the southern route coordinated by Oman remains available.
Iran's Parliament Speaker and top negotiator Mohammad Bagher Ghalibaf has declared that the era of "one-sided deals" is over, insisting that Washington must prioritize prior commitments made on Hormuz transits and normalize oil exports from Iran before talks can resume.
