Oil prices jumped more than 2 percent on Monday, August 17, after US President Donald Trump ruled out extending a memorandum of understanding (MOU) with Iran, heightening concerns over the Strait of Hormuz. In a parallel development, Iran seized a UAE-owned tanker in the strait, further escalating maritime tensions in the Gulf.
Brent crude, the international benchmark, rose 2.4 percent to $90.60 per barrel, while US benchmark West Texas Intermediate (WTI) climbed 2.2 percent to $84.20, according to Anadolu Agency data as of 18:50 GMT.
Trump Says No to MOU Renewal
The MOU, reached in June through Pakistani mediation, had established a 60-day negotiating window aimed at reaching a comprehensive settlement on Iran's nuclear program, the status of the Strait of Hormuz, and broader regional security. That deadline was nearing expiration on Monday without a deal.
Trump told reporters he was not seeking an extension. "They want to make a deal, but they are not going to make the kind of a deal that I feel is necessary," Trump said, reiterating that Iran would not be allowed to acquire nuclear weapons.
The US president also claimed that Washington had established "total control" over the Strait of Hormuz through its naval blockade. "The strait is open, and the oil prices are coming down, and they will continue to come down unless we decide to do something far more drastic than we are doing," he said.
Iran Seizes UAE Tanker
On the same day, Iran seized a tanker owned by the United Arab Emirates in the Strait of Hormuz, according to a report from Iran's Fars News Agency. The incident marks the latest in a series of confrontations targeting UAE-linked vessels in the critical waterway, through which roughly 20 percent of global oil trade passes daily.
In mid-August, the UAE's state-owned Abu Dhabi National Oil Company (ADNOC) had reported drone and missile strikes on at least two of its oil tankers transiting the strait. The UAE government described those attacks as piracy. The seizure of a UAE-owned tanker on Monday represents a further escalation.
Qatar Contacts for De-escalation
Despite the rising tensions, diplomatic channels remain partially open. Contacts between Qatar and Iran are underway aimed at de-escalation, though the rejection of the MOU extension and the tanker seizure cast doubt on the prospects for an imminent breakthrough.
The original MOU had failed to achieve its core objectives: reopening the Strait of Hormuz to full commercial traffic, addressing Iran's nuclear program, and establishing a framework for lasting peace. Without a replacement agreement, the risk of further disruption to energy shipments through the strait remains elevated.
Sources
- [Anadolu Agency - Oil prices jump over 2% as Trump rules out extending framework deal with Iran](https://www.aa.com.tr/en/economy/oil-prices-jump-over-2-as-trump-rules-out-extending-framework-deal-with-iran/4029916)
- [CryptoBriefing - Iran seizes UAE-owned tanker in Strait of Hormuz, escalating Gulf maritime tensions](https://cryptobriefing.com/iran-seizes-uae-tanker-hormuz-strait/)
