Oil Price Today (August 17): Crude oil approaches $90 again amid no breakthrough in Iran war talks. What’s next?

Oil prices gained over a percent in early Asian trade on Monday as tanker traffic through the Strait of Hormuz slowed over the weekend, with no peace deal in sight between the United States and Iran to end the conflict in the Middle East.

Brent crude futures rose 60 cents, or 0.7%, to $89, while U.S. West Texas Intermediate crude futures slipped 40 cents to $83 a barrel. Both benchmarks gained more than 5% last week after attacks on tankers operated by Abu Dhabi National Oil Company in the Strait of Hormuz and an attack on a Saudi Aramco refinery.

Over the weekend, Iranian Foreign Minister Abbas Araqchi said Iran had not decided to resume talks with the U.S. Meanwhile, U.S. President Donald Trump called on Americans to accept slightly higher gasoline prices while the conflict continues.


Shipping through the Strait of Hormuz slowed over the weekend following the tanker attacks, according to data. Kpler shiptracking data showed that five commodity vessels passed through the strait on Saturday, while none were registered on Sunday. That compares with 31 vessels during the previous weekend.

The United Arab Emirates accused Iran of attacking a third vessel operated by ADNOC while it was transiting the strait on Friday, according to the Emirati state news agency WAM. The UAE had earlier blamed Iran for two other incidents involving ADNOC vessels in the strait on Thursday evening.

How long the disruption lasts will be crucial for the outlook for crude prices. JPMorgan estimates that every additional month of disruption could add around $7 to $8 a barrel to Brent prices. If the disruption lasts for three months, the bank expects average monthly Brent prices to reach around $114 a barrel.

Goldman Sachs has also 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.

At the same time, Goldman Sachs expects tensions in the Middle East to eventually ease under its base case. The bank forecasts Brent to average $80 a barrel in the fourth quarter and $75 a barrel next year. It said risks remained tilted to the upside, as disruptions through the Strait of Hormuz and the Red Sea could last longer than expected.

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