Brent gains as Iran issues sweeping demands to reopen Hormuz
The front-month ICE Brent contract has gained by $1.53/bbl on the day from Friday, to trade at $84.56/bbl at 09.00 GMT.
IMAGE: Crude oil storage units. Getty Images
Upward pressure:
Brent crude’s price has opened the week higher, after market expectations of a swift reopening of the Strait of Hormuz took a backseat.
Tehran has demanded six major changes in Washington's foreign policy as a prerequisite to allow commercial vessels to safely transit the critical oil chokepoint, that carried one-fifth of global seaborne oil flows prior to the conflict.
“Oil prices remain supported by uncertainty surrounding the Strait of Hormuz,” two analysts from ING Bank noted.
The demands include a total cessation of all US military action in the region and the immediate withdrawal of all US naval and air forces from around Iran, among others.
“While US President Donald Trump said Washington is "semi-negotiating" with Iran… significant hurdles remain before any broader agreement is reached,” ING Bank’s analysts added.
Downward pressure:
Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.
The total number of rigs drilling for crude oil in the US increased by three over the week to 454 units last week.
The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.
By Aparupa Mazumder
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