The combination of Iran’s declared shift to a more offensive posture, its denial of the UAE missile allegations, and the continued closure of the Strait of Hormuz is keeping a firm floor under crude even as daily headline volatility fades. Traders are increasingly looking past individual statements and focusing on the physical reality that vessel transits remain in the single digits, though covert flows from Saudi Arabia and Chinese buyers are quietly cushioning some of the supply loss. The muted price reaction to Trump’s comments that the strait remains open, despite talks being neither underway nor scheduled, suggests the market has largely priced in a prolonged standoff rather than an imminent resolution. Widening attacks, from the Houthi strike on Red Sea shipping to the projectile damage reported near Hormuz, add further layers of geopolitical risk premium that could resurface sharply if any incident escalates into direct confrontation.
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This is my daily catch up post for those of us in Asia Pacific just waking up!
Just posted:
- UAE halts all trade and financial dealings with Iran, MoFA official says
- Oil: Private survey of inventory shows headline crude oil draw and huge diesel draw
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Oil extended its climb as Iran hardened its posture and denied striking the UAE, deepening doubts over any near-term Hormuz resolution.
Summary:
- Brent settled at $91.02 a barrel (up 0.17%) and WTI at $84.94 (up 0.52%), both three-week highs
- Iran’s top negotiator said the Strait of Hormuz will stay closed until Washington meets the conditions of June’s interim deal, after a senior Iranian official said the country would adopt a fully offensive military posture
- Trump said no talks with Iran are underway or scheduled, while maintaining that the strait remains open
- The UAE said it detected two ballistic missiles launched from Iran against the country; Iran’s Foreign Ministry spokesperson rejected the claim and warned against baseless accusations of staged attacks
- Yemen’s Houthis attacked vessels in the Red Sea described as a Saudi warship and its escorts, while UK maritime authorities reported a separate vessel struck by a projectile near Hormuz, causing a crew casualty
- Saudi Aramco resumed loadings from inside the strait and two Chinese shipping firms began collecting cargoes outside the Gulf, easing some supply worries even as strait transits stay in the single digits
Oil prices settled at their highest level in more than three weeks on Tuesday, as Iran signalled a harder line in its standoff with the United States and denied responsibility for missiles the UAE says were launched against it. Brent crude finished at $91.02 a barrel and WTI at $84.94, both the strongest closes since late July, even as the day’s individual headlines produced only modest price swings.
The tone came from Tehran. Iran’s chief negotiator said the Strait of Hormuz will remain shut until Washington satisfies the conditions of the interim deal signed in June, a position that followed a senior Iranian official telling Reuters the country would move to a fully offensive military posture as hopes for a lasting settlement stall. President Trump, for his part, said no talks with Iran were taking place or scheduled, while insisting the strait itself remains open and the US naval blockade in full effect.
The UAE, whose Ministry of Foreign Affairs said earlier this week that it had halted all trade, commercial and financial dealings with Iran over regional escalations, went further on Tuesday, saying it had detected two ballistic missiles fired from Iranian territory against the country. Iran’s Foreign Ministry spokesperson rejected the allegation outright, cautioning against what officials characterised as false and baseless claims of staged attacks. The exchange sharpens the picture behind Abu Dhabi’s earlier economic move, suggesting the halt in trade may have been as much a response to direct military threats as a diplomatic statement.
Elsewhere in the region, Yemen’s Houthis said they had launched missiles at a Saudi warship and its escort vessels in the Red Sea, and the UK’s maritime trade monitoring office reported a separate vessel struck by an unidentified projectile while transiting out of Hormuz, damaging its engine room and causing a crew casualty.
Despite the escalation, physical supply is proving more resilient than the rhetoric implies. Saudi Aramco has resumed loadings from inside the strait and is offering cargoes via ship-to-ship transfers off Fujairah, while two Chinese shipping majors have begun collecting cargoes from outside the Gulf chokepoint altogether. Analysts said the market has largely absorbed months of similar headlines without a clear resolution, leaving prices supported but the upside for now still contained.
This article was written by Eamonn Sheridan at investinglive.com.