Oil Holds Near $80 After Trump Says He Expects Strait of Hormuz to Reopen Soon
Summary
- International oil prices were little changed after the previous day’s sharp decline as President Donald Trump said he expects the Strait of Hormuz to reopen soon.
- Markets see Middle East tensions persisting for now, with periods of de-escalation and renewed flareups likely to repeat.
- A drop in Saudi oil exports in July and risks to the Russian oil supply chain added to uncertainty over energy supplies.
Forecast Trend Report by Period
Oil was little changed after a sharp drop a day earlier, as President Donald Trump said he expects the Strait of Hormuz to reopen soon.
Bloomberg reported on August 3 that West Texas Intermediate traded near $80 a barrel. Brent settled around $84 a barrel after falling more than 5% the previous day.
Trump told reporters at the White House a day earlier that he expects the Strait of Hormuz to reopen “literally by tomorrow.”
He also said Iran had a final chance to sign a “good deal.” Trump added that he wanted to give Tehran one last chance before moving toward “decapitation,” though he did not specify what kind of agreement he meant or who would be involved in any talks.
Iran denied holding direct negotiations with the US. It said, however, that discussions were making progress on restoring shipping through Oman and the Strait of Hormuz. Mohsen Rezaei, an adviser to Iran’s supreme leader, said on state television that the US must change its actions first.
Markets are bracing for Middle East tensions to persist. Carolyn Kissane, associate dean at New York University’s Center for Global Affairs, said periods of de-escalation and renewed flareups could repeat as long as routes for crude shipments remain available. Iran does not want a full-scale escalation, she said, but will try to keep tensions alive, and further attacks could follow once markets stabilize.
Shipments of crude and liquefied natural gas through the Strait of Hormuz remain sharply lower. By contrast, Saudi Arabia’s Red Sea port of Yanbu saw the busiest vessel traffic since threats from Houthi militants emerged.
Saudi oil exports fell in July. Bloomberg tanker-tracking data showed the kingdom exported an average of 4.19 million barrels a day in July, down 460,000 barrels a day from the previous month.
Russia’s oil supply chain has also emerged as a variable. Ukraine attacked Russian energy infrastructure at least 30 times in July, including refineries, tankers and key pipelines. That was the second-highest monthly total since Russia invaded Ukraine in 2022.
