3 weeks ago
Oil Gains Persist as Trump, Iran Clash Over Hormuz Reopening
The Strait of Hormuz is a very important narrow strip of water in the world, and many big ships carrying oil and gas sail through it every day.
Lately, that waterway has been hard to use because of a conflict between Iran and the United States.
This week, oil prices went up for three days in a row.
That happened because people hoped the strait would reopen soon, but Iran said it will only reopen if the United States agrees to its demands.
Iran wants the United States to stop punishing it with sanctions, end military threats, and pay money for damage.
President Donald Trump said no, and wants Iran to pay compensation instead.
The two countries also argued about who should pay for people hurt or killed in the conflict.
Because oil is used to make fuel for cars and trucks, when prices go up, many things become more expensive.
Right now, no one knows when the strait will fully reopen, so oil prices might keep changing.
Oil prices extended gains for a third day, with Brent rising 4.99% to $87.72 a barrel and WTI up 5.05% to $82.13, the biggest gains for both benchmarks since July 29.
Iran said the Strait of Hormuz will not fully reopen unless the US lifts sanctions, ends military threats and pays compensation for war damages.
President Donald Trump rejected Iran's compensation demand and announced new demands for payment for people killed or gravely wounded by Iranian actions.
Iran and Oman are close to finalising a shipping agreement on new lanes through the strait, but Tehran says it is not in direct talks with Washington.
US strategic oil reserves fell to their lowest level since 1983, while Houthi attacks on Saudi Aramco's Jazan refinery and Ukrainian strikes on Russian energy infrastructure add to supply threats.
- Who
- Iran and the United States, including President Donald Trump, with Oman involved in shipping talks; Iranian Foreign Ministry spokesperson Esmaeil Baqaei also criticised US sanctions policy.
- What
- Oil prices extended gains for a third day as Iran set conditions for fully reopening the Strait of Hormuz and President Trump demanded compensation from Iran.
- Where
- The Strait of Hormuz, a strategic waterway linking the Persian Gulf and the Gulf of Oman, with related attacks on energy sites in Saudi Arabia and Russia.
- When
- Monday, with both oil benchmarks posting their biggest gains since July 29; Iran's criticism of US sanctions came on Tuesday.
- Why
- Hopes of a reopening faded after Iran said the strait will not fully reopen unless the US meets its conditions, while Trump rejected Tehran's demands and made his own compensation demands.
Iran
United States
Compensation demands
Iran
Iran demands reparations from the US and Israel for damage caused by their military operations, along with an end to US sanctions and military threats.
United States
Trump rejected Iran's demand and said he will demand compensation from Iran for people killed or gravely wounded by Iranian actions, including families of USS Cole victims and people in Lebanon, Syria, Yemen and Gaza.
Conditions for reopening the Strait of Hormuz
Iran
Iran says the waterway will not be fully reopened based on a shipping agreement with Oman alone; the US must meet its conditions, and Tehran is not currently in direct talks with Washington.
United States
Trump says the Strait of Hormuz is now open and completely controlled by Washington, and claims compensation for Iran was never mentioned in negotiations despite a June memorandum of understanding detailing a $300 billion fund for Iran's rehabilitation and economic development.
Sanctions and diplomacy
Iran
Iran's Foreign Ministry spokesperson Esmaeil Baqaei accused Washington of being 'addicted' to sanctions and 'incapable' of pursuing diplomacy, saying the US turns to sanctions when diplomacy fails.
United States
US Treasury Secretary Scott Bessent reportedly claimed sanctions were 'suffocating' Iran, and Trump said Iran would 'find out' what comes next, keeping military escalation on the table.
Key facts
- Brent crude
- $87.72 a barrel, up 4.99%
- US WTI crude
- $82.13 a barrel, up 5.05%
- Biggest daily gain
- Since July 29 for both benchmarks
- Hormuz share of global oil and LNG
- About one-fifth of shipments before the conflict
- US Strategic Petroleum Reserve
- 298.7 million barrels, lowest since January 1983; fell 6.1 million barrels last week
- Saudi Aramco Jazan refinery
- Capacity about 400,000 barrels per day; restart postponed to August 30 after Houthi attacks
- ADNOC vessels attacked
- 15 vessels transiting the Strait of Hormuz since the conflict began
- USS Cole attack
- October 12, 2000; killed 17 US sailors; blamed on al Qaeda, not Iran
Quotes
President Donald Trump
U.S. President
“"I am likewise demanding compensation from Iran, for all of the people that they have killed and gravely wounded with their roadside bombs and many conflicts, for which they are famous."”
indianexpress.com
“You’ll find out.”
livemint.com
Esmaeil Baqaei
Iranian Foreign Ministry spokesperson
“The US Secretary of the Treasury has boasted of ‘suffocating’ Iran through economic sanctions. Beyond its sheer pathos, the claim is a stark testament to America’s compulsive addiction to sanctions.”
livemint.com
Sources
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