Brent holds above $83 as Iran rules out direct US talks

Brent crude held above $83 a barrel as Iran's foreign minister said Tehran is not in direct talks with the U.S., keeping the Strait of Hormuz — the chokepoint for one-fifth of global oil and gas — shut.

"As long as the American violation of the memorandum of understanding continues and the U.S. does not make amends for its violations, there is no possibility of resuming negotiations," Abbas Araghchi, Iran's foreign minister, said Sunday, according to state TV.

Araghchi said consultations with Oman on establishing a new shipping route through the strait have "reached their final stage," but stressed any agreement would not mean the waterway has reopened. Iran's conditions for a full reopening include lifting the U.S. naval blockade, withdrawing military forces from the region, removing sanctions, releasing frozen assets and paying compensation for war damage, according to Mohammad Bagher Zolghadr, who heads Iran's Supreme National Security Council.

The impasse keeps a geopolitical premium embedded in crude. Brent settled above $83 a barrel last week as traders weighed the prospects of a deal that would restore millions of barrels of Persian Gulf supply. If talks fail, supply disruption fears could push prices significantly higher; a breakthrough would likely trigger a sharp decline.

Trump on Sunday told Axios the U.S. was "low-keying it" and "only semi-negotiating" with Iran, saying Washington could wait for Tehran's economic pain to soften its stance. Iran's year-on-year inflation reached 77 percent, according to the central bank. The remarks follow weeks of Trump threatening massive airstrikes on Iran only to pull back, saying he wanted to give negotiations a chance.

The June memorandum of understanding — a short-lived interim peace agreement — collapsed last month after the two sides exchanged attacks for nearly two weeks before Trump halted the bombardment. The war began Feb. 28 when the U.S. and Israel attacked Iran, and traffic through the strait has been largely blocked since, though some ships have continued to ferry cargoes under a shuttle program involving U.S. military help. Washington has repeatedly suggested it is part of negotiations over the management of Hormuz, a claim Iran disputes.

Houthi attacks add to supply risk

Beyond Hormuz, risks remain elevated in the Red Sea. Yemen's Houthi rebels claimed they struck Saudi Aramco's Jizan oil refinery, a 400,000 barrel-a-day complex, marking at least the second fire at the facility in the past month. Saudi authorities reported the blaze was quickly extinguished with no injuries. Citi analysts flagged continued Houthi attacks and threats as an additional risk factor for oil markets outside the strait. The Houthis have also announced a blockade on Saudi Arabia's ports, a key alternative export route for the kingdom's oil.

Deal path hinges on Khamenei

Any Hormuz deal requires approval from Iran's Supreme Leader Mojtaba Khamenei, who has not been seen in public since the war began. Khamenei said Sunday he met with President Masoud Pezeshkian, whose support for a ceasefire has drawn criticism from Iranian hardliners. Oman said its talks with Tehran were progressing in "a positive and constructive atmosphere," calling for a halt on actions in the strait to give space for diplomatic efforts. U.S. Vice President JD Vance said Saturday there had been recent progress in talks but remained skeptical about whether Iran could deliver what Washington needs.

Oil prices swung between gains and losses last week, with Brent eventually settling above $83 a barrel as traders weighed the prospects of a deal expected to clear the way for the restoration of millions of barrels of supply from the Persian Gulf. With the strait handling roughly 20 percent of global oil and gas shipments, the impasse keeps a geopolitical premium embedded in crude prices, and any prolonged closure would have significant implications for global energy markets and inflation expectations.

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