Irans Proposal Fails to Stabilize Oil Prices in Strait of Hormuz

Iran Offers to Reopen Strait in Exchange for Nuclear Talks Deferral

The price of Brent crude oil rose 3 percent on Tuesday, reaching $111.49 per barrel, as traders continued to monitor the situation in the Strait of Hormuz. The international benchmark has seen a significant increase over the past week, rising 13 percent from its previous low below $100.

Iranian Foreign Minister Abbas Araghchi shared proposals with Pakistan to reopen the strait, which is critical for global fuel supplies, amid stalled peace negotiations between the US and Iran. However, the proposal did not appear to alleviate concerns about the blockade of the waterway, which has reduced maritime traffic in recent months.

According to ship tracking data, only eight vessels crossed the strait on Sunday, down from 19 transits the previous day. This represents a significant decrease from pre-war levels, when an average of 129 vessels passed through the strait each day.

The blockade and attacks on regional energy infrastructure have resulted in reduced global oil production by 14.5 million barrels per day, according to a Goldman Sachs estimate. Shipping and logistics experts warn that it will likely take months for energy flows to return to normal, even if a deal is reached between the US and Iran.

As of Tuesday, the US has not commented publicly on the Iranian proposal. The situation remains fluid, with ongoing negotiations between the two countries and the continued impact of the blockade on global energy supplies.

Source: Al Jazeera