Oil Extends Rally Above $84 as Hormuz Reopening Talks Drag On

Oil extended its gains as delays in talks to reopen the Strait of Hormuz and rising tensions in the Middle East continued to support prices.

Brent crude has climbed more than 5% over the past three trading sessions and was trading above $84 a barrel on Aug. 9, Bloomberg reported. West Texas Intermediate was near $79 a barrel.

Iranian Foreign Minister Abbas Araghchi said over the weekend that negotiations with Oman to resume transit through the Strait of Hormuz were "very close." Still, he said there would be no direct talks with the US for the time being, accusing Washington of violating a temporary ceasefire agreement reached in June.

Even if an agreement is reached, the strait would not reopen immediately, he added. Restoring normal energy shipments would take time.

President Donald Trump also indicated he was in no rush to negotiate. In an interview with Axios, he said he was "low-keying it."

Geopolitical risks surrounding the Strait of Hormuz are still underpinning oil prices, the market says. Haris Khurshid, chief investment officer at Karobaar Capital, said geopolitical risks would limit the downside for crude as long as the risk of disruptions to oil shipments remains unresolved.

Tensions across the Middle East have also persisted. Yemen's Iran-backed Houthi rebels claimed they attacked a Saudi refinery facility in Jazan near the Red Sea. A tanker operated by Abu Dhabi National Oil Co., known as ADNOC, was also reported to have been attacked in the Strait of Hormuz over the weekend.

Meanwhile, Iran has repeatedly demanded that the US lift its maritime blockade, remove sanctions on Tehran and provide compensation for war damage as conditions for fully reopening the Strait of Hormuz.