Oil Price Today (August 10): Crude oil rises to $85 amid Hormuz worries as attacks continue. What are experts saying?

Oil prices moved higher on Monday as uncertainty over when the Strait of Hormuz will reopen returned to the market. Iran said a deal with Oman to establish new shipping lanes was in its final stages, but maintained that the US must meet additional conditions before the waterway can reopen.

Crude oil price on August 10

Brent crude futures rose $1.12 cents, or 1.5%, to $84.7 a barrel. US West Texas Intermediate crude futures gained 94 cents, or 1.07%, to $79 a barrel. Both benchmarks had dropped more than 7% last week on expectations that Iran and Oman were nearing an agreement that could pave the way for the reopening of the Strait of Hormuz, through which a fifth of the world's oil was transported before the war.

Also read: Trump says US is 'low-keying it' with Iran, stresses economic pain


Iran said on Sunday that its deal with Oman was in the "final stages", but also reiterated that the waterway would only reopen after Washington met other conditions, including compensating Iran for widespread US attacks.

Iranian Foreign Minister Abbas Araqchi said on Sunday that Tehran and Washington were not holding talks and that Iran would not enter negotiations as long as the US continued to breach an interim deal signed in June.

Attacks continue

Supply concerns were also heightened after a Saudi oil facility was attacked over the weekend. The Iran-aligned Houthis said they had struck Saudi Aramco's Jazan refinery on Sunday, two days after Saudi Arabia signed a defence pact with Turkey and Pakistan in response to rising regional instability stemming from the US-Israeli war on Iran.

The UAE's ADNOC said on Friday that 15 of its vessels had come under attack while transiting the Strait of Hormuz since the conflict began.

What are analysts saying?

The duration of the supply disruption will be a key factor in determining where oil prices go from here. JPMorgan estimates that every additional month of disruption could add about $7 to $8 a barrel to Brent prices. If the disruption lasts three months, the bank expects average monthly Brent prices to reach around $114 a barrel.

Goldman Sachs has similarly warned that Brent could rise to $120 a barrel if shipping disruptions through the Strait of Hormuz, the world's most important oil transit route, continue.

Read more: US Iran war: Trump may ditch nuclear deal plan if Tehran reopens Hormuz

Its base case, however, remains that tensions in the Middle East will eventually ease. In that scenario, Goldman expects Brent to average $80 a barrel in the fourth quarter and $75 a barrel next year. It also cautioned that risks remain tilted to the upside due to the possibility of prolonged disruptions in the Strait of Hormuz and the Red Sea.

"The direction of our outlook is unchanged; the path and the timeline have shifted. We still expect oil to cool as we move into 2027, for three reasons: supply outside the conflict zone is expanding, with OPEC+ raising production targets, the UAE at record output and non-OPEC barrels responding to price," said Anindya Banerjee, Head of Commodity Research at Kotak Securities.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)