Oil Prices Remain Stable Amidst Zero Traffic in Hormuz and Stalled Iran-US Talks on Strait Access
Oil prices remained stable in early trading on Monday, with Brent crude rising 0.42% to $88.89 per barrel and WTI crude increasing by 0.21% to $82.57 as of 7:20 AM. This stability comes amid a significant decline in vessel movements through the Strait of Hormuz, raising concerns about oil supply disruptions. Efforts to resolve the ongoing US-Iran conflict have shown little progress, further complicating the situation.
Strait of Hormuz Activity Declines
Trading activity in the vital Strait of Hormuz nearly halted over the weekend. Kpler’s ship tracking data indicated that only five commodity vessels crossed the strait on Saturday, with no crossings recorded on Sunday. This is a stark contrast to the 31 vessels that transited the strait during the previous weekend. Among the few vessels that did enter the waterway was an empty Very Large Crude Carrier with its Automatic Identification System turned off.
The slowdown follows recent attacks on three vessels operated by the Abu Dhabi National Oil Company (ADNOC) in the strait. The United Arab Emirates reported that a third ADNOC vessel was attacked while passing through on Friday. The UAE has attributed these incidents to Iran, which has denied involvement. The recorded traffic through the strait remains a fraction of the more than 130 vessels that typically crossed daily before the onset of the conflict involving the US and Israel against Iran in February.
US-Iran Negotiations Stalled
Negotiations between Iran and the United States to resolve the conflict remain stalled. Iranian Foreign Minister Abbas Araqchi stated that Tehran has not yet decided whether to resume talks with Washington. Meanwhile, US President Donald Trump has advised Americans to accept higher gasoline prices as long as the conflict persists. The United States has indicated it could maintain a naval blockade of Iran indefinitely, with Araqchi asserting that Washington must meet Iran’s conditions regarding the strait before shipping can resume.
The Strait of Hormuz is crucial for global oil and liquefied natural gas shipments, accounting for a fifth of the world’s supply before the conflict. Traffic has also decreased at the Bab el-Mandeb strait, where Yemeni Houthis declared a naval blockade on Saudi Arabia on July 20. Kpler recorded 49 commodity vessel transits over the weekend, down from 55 the previous week, with no Saudi oil shipments tracked.
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