Brent crude futures for October delivery traded at $90 per barrel on Tuesday, August 11, at 11:24 a.m. local time (08:24 GMT), up 2.6 percent from the previous close of $87.72, as fading hopes for a US-Iran agreement revived fears of a wider Middle East escalation, according to Anadolu Agency. US benchmark West Texas Intermediate (WTI) futures for September stood at $84.36 per barrel, up 2.7 percent from $82.13 in the previous session.
On Wednesday, August 12, October Brent futures were at $89.53 as of 08:00 GMT, up more than 2 percent overnight and about 24 percent above pre-war levels recorded before the US-Israel war on Iran began in late February, Al Jazeera reported.
Iran insists the Strait of Hormuz, which carried about one-fifth of global oil supplies before the war, will remain closed until the United States accepts its conditions, including war reparations and the lifting of sanctions. Just 10 vessels crossed the waterway on Monday, August 10, against roughly 130 daily transits before the war, according to maritime intelligence firm Windward. President Donald Trump claimed on Tuesday that Washington had "total control" over the strait, despite traffic remaining at a fraction of pre-war levels. Tehran considers its talks with Oman separate from the question of reopening the strait, while Qatar's Foreign Ministry said on Tuesday that the Omani-Iranian talks were at an advanced stage, with Doha wanting the waterway reopened "as soon as possible".
On the security front, Yemen's internationally recognised government accused the Iran-aligned Houthis on Tuesday of killing six people in missile attacks on a commercial vessel in the Bab al-Mandeb strait, which separates the Arabian Peninsula from the Horn of Africa. Yemen's coastguard said the victims included two members of the security forces deployed on a rescue mission after the initial attack.
In Libya, a drone targeted an oil facility in the western city of Zawiya early Tuesday, the third such incident since Sunday, after an attack on a gasoline storage tank at the Zawiya oil depot a day earlier sparked a major fire and prompted the National Oil Corporation (NOC) to declare a state of "maximum emergency". The drone fell near the main oil tank and pipeline network at a plant operated by the Zawiya Oil Refining Company, with no casualties or material damage reported. The NOC warned that continued attacks could force it to declare force majeure and halt operations at the Zawiya refinery. Libya's crude oil production averaged approximately 1.35 million barrels per day in July, according to NOC data.
Trump declined on Monday to detail the next steps in the negotiations, answering "You'll find out" when asked what would follow the latest round of talks, which he had previously described as Iran's "last chance" before possible military action. Asked whether a "massive escalation" remained an option, Trump said the United States had the capability to act if necessary, reiterating that Iran should compensate Washington for damage he said Tehran had caused over the past 50 years.
US emergency stocks are also shrinking: Strategic Petroleum Reserve (SPR) inventories fell by 6.1 million barrels last week to 298.7 million barrels, their lowest level since 1983, according to US Department of Energy data released Monday. The drawdowns are part of Washington's commitment to release 172 million barrels under a coordinated International Energy Agency action that involves 400 million barrels from participating countries.
"Markets have not completely lost hope for a deal, but confidence is clearly eroding," Tim Waterer, chief market analyst at Australia-based KCM Trade in Sydney, told Al Jazeera. June Goh, senior oil market analyst at Sparta Commodities in Singapore, said prices remained supported at the $85-90 per barrel level "barring any new headlines on renewed optimism over the diplomatic talks".
In its latest outlook released Tuesday, the US Energy Information Administration said it did not expect Middle East oil production to return to near pre-conflict levels until early 2027 and projected Brent to average $87 a barrel in 2026.
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