Oil prices rose nearly 2% on Monday after Iran said the Strait of Hormuz would not reopen until the United States meets several conditions, reviving concerns over global energy supplies.
Brent crude futures gained $1.40, or 1.7%, to $84.95 a barrel by 1218 GMT, while U.S. West Texas Intermediate crude rose $1.33, or 1.7%, to $79.51.
The gains came after both benchmarks fell more than 7% last week on expectations that Iran and Oman were nearing an agreement to reopen the strategic waterway.
The Strait of Hormuz, between Iran and Oman, previously carried about one-fifth of global oil and liquefied natural gas supplies before the Middle East conflict began in late February.
Iran said it was close to a final agreement with Oman to establish new shipping lanes through the strait, but insisted Washington must first meet demands including compensation, an end to sanctions and an end to military threats.
Iranian Foreign Minister Abbas Araqchi said on Sunday that Tehran and Washington were not holding talks and that Iran would not resume negotiations while the United States violated an interim agreement reached in June.
Analysts at SEB Research said oil was trading between $80 and $85 a barrel despite the strait remaining largely closed, reflecting expectations that a solution could be reached soon.
Supply concerns were also heightened after Iran-aligned Houthi forces said they had attacked Saudi Aramco’s Jazan refinery in Saudi Arabia on Sunday, adding to regional tensions.
Separately, UAE oil producer ADNOC said 15 of its vessels had been attacked while transiting the Strait of Hormuz since the conflict began, highlighting the risks facing energy shipments.
Analysts said oil prices could fall if unrestricted shipping through Hormuz is restored, but a breakdown in negotiations or further supply disruptions could push prices higher by increasing the geopolitical risk premium.