Oil Dips on MidEast Breakthrough Hopes Despite Iran Stance


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude and product futures began August trading on a 
weaker note on Monday (8/3) as a lull in Middle East fighting eased tensions 
across the region, although there was no evident pickup of cargo on key Middle 
East waters for energy shipments.

   Despite U.S. President Donald Trump's assertion that bilateral talks were 
set to resume, Iranian Foreign Ministry spokesperson Esmaeil Baqaei pushed back 
Monday, saying Tehran has no plans for direct negotiations with Washington.

   Media reports suggest U.S. officials had also downplayed expectations, with 
no new diplomatic efforts noted beyond existing mediated channels.

   Tehran has stuck to its position that any vessel crossing the Strait of 
Hormuz will have to use the Iran-drawn corridor on the waterway as part of its 
longer-term plan to collect a toll from passing ships. The United States, 
meanwhile, is trying to promote an alternative route via Oman waters.

   "We are not negotiating with the United States at this time," Baghaei 
Hamaneh, spokesman for Iran's Ministry of Foreign Affairs, said.  "Our 
negotiations are with Oman and are focused on reaching an understanding on a 
route that will ensure the safe passage of shipping through the Strait of 
Hormuz."

   Maritime services report that daily transit on the Hormuz remains at roughly 
10 to 11 ships per 24-hour period, representing about 11% to 15% of pre-crisis 
levels. Approximately 180 to 350 vessels are anchored in regional holding zones 
awaiting clearance, naval escort or insurance coverage.

   Away from the Hormuz, the Bab-el-Mandeb Strait connecting the Red Sea to the 
Gulf of Aden is seeing roughly 4 million bpd of Saudi crude diverted through 
its waters. But heightened Houthi threat warnings and near-miss drone strikes 
have throttled daily transits to a trickle here too, forcing over 80% of 
transiting tankers to operate with transponders off or broadcast armed security 
details to keep Asian-bound volumes moving.

   Despite this, energy futures began August trading on a weaker note, on 
apparent hopes for a breakthrough in shipping conditions.

   NYMEX WTI for September delivery settled lower by $4.33, or 5%, at $80.34 
bbl. The U.S. crude benchmark rose 22% last month.

   ICE Brent for October delivery finished down $4.16, or 4.7%, at $83.77 bbl.  
The global crude benchmark gained 21% last month.

   Refined products followed crude futures lower.

   In diesel, NYMEX ULSD futures for September delivery settled down $0.2443, 
or 6%, at $3.8772 gallon.

   On the gasoline front, NYMEX September RBOB softened by $0.2549, or 8%, to 
close at $2.9667 a gallon.

   The US dollar index strengthened by 0.051 points to 99.840 against a basket 
of currencies.




(c) Copyright 2026 DTN, LLC. All rights reserved.