Oil Holds Advance as Fresh Trump Demands Cloud Hormuz Outlook
(Bloomberg) -- Oil held a four-day gain after President Donald Trump made sweeping new demands on Iran, complicating the outlook for a deal to reopen the crucial Strait of Hormuz and restore global energy flows.
Brent traded near $88 a barrel after advancing 5% in the previous session, while West Texas Intermediate was above $82. The US leader demanded compensation from Iran for the people it has killed in conflicts after Tehran reiterated requests for reparations as part of talks to wind down the conflict.
Trump said in a social media post that he would put the new demands “firmly into any, and all, future negotiations.” The hardening stance makes it unlikely that Tehran and Washington will be able to agree to any immediate pact.
Crude has jumped almost 45% this year after months of volatile trading, as the war in the Middle East disrupted flows and damaged infrastructure. Product prices have rallied even harder, with diesel also gaining from the impact of the Russia-Ukraine war, which has squeezed supplies. Benchmark prices of the key fuel in Europe jumped on Monday, and have more than doubled in 2026.
Iran and Oman have been negotiating a deal to reopen Hormuz, although Tehran reiterated on Monday an accord would require the US to end its blockade and compensate for damages. About a fifth of the world’s oil and liquefied natural gas was shipped through the waterway to global markets before the war.
“Given that the strait is still closed, global inventories have been reduced dramatically, and flows are nowhere near normal levels, we could see shorts cover aggressively,” said Bart Melek, global head of commodity strategy at TD Securities, referring to traders ending wagers on lower prices. “We continue to expect Brent to trade $10-$15 above current levels.”
The Middle East conflict has also spread to the Red Sea, where Iran-backed Houthi militants are threatening shipping and energy infrastructure. Saudi Aramco has pushed back restarting its Jazan refinery to late August, according to IIR Energy, following an attack claimed by the rebel group.
Trump said on Monday that compensation for Iran “was never mentioned in any of our negotiations or meetings.” But a 14-point memorandum of understanding that Tehran and Washington agreed to in June detailed plans for the US and regional partners to develop a $300 billion fund for the “rehabilitation and economic development” of Iran after the war.
The US president had signaled on Sunday that he was prepared to let economic pressure on Iran build, rather than launch fresh military strikes to force a reopening of Hormuz, where visible traffic remains at a trickle.
About five vessels are transiting each day, far below the roughly 14 ships a day seen after the US and Iran reached a memorandum of understanding in June, Energy Aspects founder and director of market intelligence Amrita Sen said in an interview with Bloomberg Television on Monday.
Further insights into global market conditions will come later Tuesday from the US Energy Information Administration, which is scheduled to issue its monthly Short-Term Energy Outlook. Commercial crude inventories in the country touched to the lowest level since 2018 last month, while holdings in the Strategic Petroleum Reserve have sunk to the smallest in more than four decades.
©2026 Bloomberg L.P.
