The Strait of Hormuz impasse: uncertain oil price prospects

The impasse in the Strait of Hormuz has led to uncertainty about the oil price prospects, which remain below the recent highs, despite the weakening of market expectations for a rapid re-establishment of the Strait. Brent's crude oil futures fell by more than 7 per cent last week, owing to a signal from Washington that an agreement had been reached with Tehran, but the agreement had not yet been implemented and the prospects seemed to have deteriorated over the weekend. Tehran insists that Washington must comply with several conditions in order to restart the Strait. The President of the United States, Trump, for his part, implied a strategic shift that would rely on economic pressure on Tehran rather than on an immediate military strike. On Tuesday morning, the international benchmark Brent crude oil approached $88 per barrel, up from about $83 last weekend, but still below the peak of $100 last month. The market expressed short-term confidence in the negotiations between Iran and Oman on a temporary shipping route, and it was expected that military escalation between the United States and Iran might be curtailed. Analyst Modupe Adegbembo stated that although the agreement might not be ideal, it might allow more oil to flow into the Strait of Hormuz。