Oil climbs as Hormuz reopening hinges on US conditions

Oil prices moved higher on Monday as markets digested signals from Tehran that a deal to reopen the Strait of Hormuz is close but not yet complete.

Brent crude futures gained 91 cents, or 1.09%, to $84.46 a barrel, while US West Texas Intermediate crude rose 61 cents, or 0.78%, to $78.79 a barrel. Both benchmarks had fallen more than 7% last week on hopes that Iran and Oman were nearing an agreement that would restore shipping through the strait, which carried a fifth of the world's oil before the conflict.

Iran said on Sunday that a deal with Oman defining new shipping lanes was in its "final stages," but reiterated that the waterway would only reopen once Washington met other conditions, including compensation for Iran's widespread attacks.

"Traders have been conditioned by the on-again, off-again nature of the negotiations and are waiting for tangible evidence, such as verified tanker movements or formal agreements, before further unwinding the risk premium," said Tim Waterer, chief market analyst at KCM Trade.

Iranian Foreign Minister Abbas Araqchi said on Sunday that Tehran and Washington are not engaged in talks, and that negotiations will not begin as long as the US breaches an interim deal signed in June.

Supply concerns were also renewed after a Saudi oil plant was attacked over the weekend. The Iran-aligned Houthis said they had hit Saudi Aramco's Jazan refinery on Sunday, two days after the kingdom signed a defence pact with Turkey and Pakistan in response to regional instability from the US-Israeli war on Iran.

Separately, the UAE's ADNOC said on Friday that 15 of its vessels had been attacked while transiting the Strait of Hormuz since the conflict began.