Iran confirms Strait of Hormuz closed as Brent crude falls 4.9%

Iran's confirmation that the Strait of Hormuz remains closed keeps global oil markets on edge even as diplomatic talks with Oman show progress.

Iran's Foreign Ministry confirmed Sunday the Strait of Hormuz remains shut, keeping a fifth of the world's oil supply offline as talks with Oman to reopen the waterway made positive progress. The announcement came after the U.S. paused its bombing campaign for two consecutive nights, following 13 straight nights of strikes.

"The talks between Iran and Oman on managing the Strait of Hormuz have been constructive and are moving in a positive direction," an Iranian official told CBS News, speaking on condition of anonymity.

Brent crude fell 4.9% to $92.02 a barrel Sunday after the U.S. paused strikes, retreating from a brief spike above $102 last week — a $30 surge from early July levels. Only six commercial vessels transited the strait Thursday, down from 15 a day earlier, according to intelligence firm Kpler. U.S. gasoline prices reached $4.11 a gallon, nearly a dollar above last year, AAA data show.

The closure threatens to reignite global inflation just as central banks signal rate cuts, with the S&P 500 falling sharply last week on stagflation fears. The Trump administration requested $67 billion in emergency funding from Congress to restock munitions, while Defense Secretary Pete Hegseth acknowledged the U.S. cannot sustain the current rate of precision-missile expenditure.

The lull in fighting followed a Chinese-led push to resume stalled diplomatic efforts, with Omani officials traveling to Tehran on Friday for talks. The U.S. paused its bombing campaign to avoid disrupting the delicate diplomacy, two regional sources told CBS News. Iran's army said it halted retaliatory attacks on U.S. allies after Washington paused its strikes.

But the fragile truce faces multiple threats. Ukraine struck an Iranian commercial vessel in the Caspian Sea on Saturday, killing one sailor, after President Volodymyr Zelenskyy accused Russia of providing satellite imagery to Iran for targeting U.S. bases. Iran's Foreign Minister Abbas Araghchi condemned the attack and demanded a response from the UN Security Council and the European Union.

The Houthi militia in Yemen, an Iran-backed group, struck two Saudi-flagged oil tankers in the Red Sea this week and targeted Aramco facilities in Jizan and Yanbu, expanding the conflict to the Bab el-Mandeb Strait. Saudi Arabia retaliated with airstrikes on the Red Sea city of Hodeida. The Houthis said they are enforcing a blockade limited to Saudi vessels, though 49 ships transited Bab el-Mandeb on Thursday, near normal levels, Kpler data show.

Diplomatic Window Narrows

Israeli Prime Minister Benjamin Netanyahu is scheduled to meet President Trump in Washington on Tuesday, where he is expected to discuss Iran's nuclear program. Netanyahu told Fox News he supports Trump's pressure campaign but warned of a "very forceful" response if Iran attacks Israel. The meeting comes as Sen. Bernie Sanders called for a negotiated end to the war, calling it "unconstitutional" and "illegal."

The U.S. has reimposed a naval blockade on Iranian ports, with CENTCOM saying it disabled a tanker attempting to run the blockade and boarded two vessels. Iran's Revolutionary Guard said it stopped six ships attempting to transit the strait through unauthorized routes on Monday, firing warning shots.

Kuwait and Pakistan signed a strategic defense agreement, signaling Gulf states are broadening security relationships beyond traditional dependence on the U.S. Pakistan has emerged as a diplomatic broker between Iran and Gulf Arab states.

This article is for informational purposes only and does not constitute investment advice.