Oil holds above $100/bbl as Trump rules out sanctions relief for Iran

Crude oil prices have continued to trade above the $100/bbl mark after US President Donald Trump ruled out easing economic sanctions on Iran amid stalled mediation efforts.

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The US President has dismissed media reports suggesting that he has offered to release frozen Iranian funds, a concession Tehran has actively demanded in exchange for reopening the Strait of Hormuz.

“This is untrue. I offered them NOTHING!” Trump said on social media platform Truth Social.

These punitive sanctions have severely choked exports from one of OPEC’s largest producers. The country cut production by 399,000 b/d amid the ongoing war, to about 2.1 million b/d last month, OPEC said in its monthly oil market report.

Hormuz threats persist despite some positive news

Meanwhile, the United Kingdom Maritime Trade Operations (UKMTO) agency reported another incident within the Strait of Hormuz on Sunday.

Another commercial vessel was struck by a suspected unknown projectile while transiting the strait, resulting in a fire, the agency noted.

Despite these reports, Brent’s price came under downward pressure, following news that oil flows through the region have seen some recovery.

Crude oil exports from Middle East producers rebounded in September to 16.3 million b/d, Reuters reported, citing data from market intelligence provider Kpler – marking the highest levels since Washington launched its all-out war again Iran started in February.

Another report by Bloomberg, citing J.P. Morgan analysts, suggested that crude oil shipments from the region have rebounded to 17.5 million b/d, or 98% of pre-war levels.

However, recovery in regional shipments does not necessarily reflect increased transit through the strait, as major exporters, including Saudi Arabia and the UAE, continue to rely on alternative routes to bypass the volatile chokepoint.

As of yesterday, 16 vessels attempted to transit the strait – 11 inbound, five outbound, market intelligence provider Windward reported. Of this, five vessels moved in dark mode, the data also showed.

Although yesterday’s transit volume was higher than the 11 crossings noted on Sunday, vessel traffic remains well below the pre-war average of 140 daily transits.

Moreover, market analysts have raised doubts about whether this recovery in oil flows is sustainable.

“Flows through the Strait of Hormuz itself are on track for about 7.4 million barrels a day [7.4 million b/d] this month. That is a recovery, not a reopening,” Price Futures Group’s senior market analyst Phil Flynn remarked.

By Aparupa Mazumder

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