Oil prices rose in early trading on Monday as Iran’s sweeping conditions for reopening the Strait of Hormuz cast fresh uncertainty over the prospects of a quick return to normal shipping through the strategic waterway.
As at 03:37 a.m. (WAT), Brent crude was trading at $84.37 a barrel, up 0.98%, while West Texas Intermediate (WTI) stood at $78.76, gaining 0.74%. Earlier market data showed Brent at $84.30, up 0.90%, and WTI at $78.68, up 0.64%, pointing to continued upward pressure as traders assessed Tehran’s latest position.
The latest price movement followed Iran’s declaration that the Strait of Hormuz would remain closed until the United States meets a series of demands that go well beyond shipping arrangements. The conditions, announced by Mohammad Baqer Zolghadr, secretary of Iran’s Supreme National Security Council, include an end to US military action and threats, a permanent end to the war, withdrawal of US naval and air forces from around Iran, compensation for war damages, sanctions relief and the release of frozen Iranian assets.
The demands have complicated expectations that a draft US-Iran agreement could quickly restore energy flows through Hormuz. The development is particularly significant for oil markets because the strait remains one of the world’s most important energy chokepoints, while tanker movements through the waterway have remained severely constrained.
Shipping data cited by Oilprice.com showed that only 33 vessels transited the Strait of Hormuz from Monday to Thursday, compared with 50 during the corresponding period a week earlier. Only six crude tankers had reportedly cleared the strait outbound so far this week, highlighting the continued weakness in physical oil flows despite diplomatic efforts to establish a shipping corridor.
The uncertainty has been compounded by Iran’s consideration of restrictions on US and Israeli vessels and earlier proposals for transit fees. The European Union has also accused Iran’s Islamic Revolutionary Guard Corps Navy of enforcing a screening and toll system for vessels using the waterway, adding another layer of uncertainty for shipowners, insurers and energy traders.
The United States, however, has maintained a more optimistic assessment of the negotiations. Vice President JD Vance said Washington expects oil and gas flows from the Gulf to eventually return to pre-war levels. He also said Iran had told the US that it had no plans to impose tolls on vessels using Hormuz, although Washington remains cautious about relying on Tehran’s assurances.
The contrasting positions have left the market with two fundamentally different expectations. While Washington is signalling the eventual restoration of normal energy flows, Tehran is linking the reopening of Hormuz to major political, military and financial concessions from the United States.
For oil markets, the immediate implication is that the prospect of a rapid reopening of the Strait of Hormuz has become less certain. Until there is greater clarity over the conditions for reopening and actual evidence of sustained tanker movement through the waterway, traders are likely to continue attaching a geopolitical risk premium to crude prices.
The key issue now is whether diplomatic efforts can bridge the gap between Washington’s expectation of restored energy flows and Tehran’s demands for broader concessions. Any prolonged disruption to tanker traffic could tighten physical supply further, while a credible agreement that restores normal passage could quickly ease the pressure currently supporting oil prices.