Oil prices rise as markets track US-Iran negotiations

Oil prices moved higher on July 7 as investor concerns over stalled negotiations between the United States and Iran outweighed the impact of a modest recovery in shipping activity through the Strait of Hormuz.

Brent crude futures climbed $1.02, or 1.42%, to $73.01 per barrel, while US West Texas Intermediate crude gained 93 cents, or 1.36%, to $69.48 per barrel as of 0748 GMT, Caliber.Az reports, citing Reuters.

"The deal is by no means signed yet, so something can still go wrong and any comments from either side could raise concern which is helping to underpin prices and it's basically removing some of the recent intense focus on an increasingly oversupplied market," Saxo Bank analyst Ole Hansen said.

Iran's foreign minister stated that negotiations with Washington on a final agreement would not proceed as long as US threats continue. His remarks followed US President Donald Trump's warning to "finish the job" unless a deal is reached.

"So if there's any further escalation, then $75 would be the natural level to look at next ahead of $80," Hansen added.

Market participants continue to closely watch developments in US-Iran talks and the potential impact on shipping through the Strait of Hormuz, a vital energy corridor that, before the Iran war began at the end of February, handled roughly one-fifth of the world's daily oil and liquefied natural gas supplies.

According to Axios, citing two US officials, Iran's Revolutionary Guards fired at least two missiles at commercial vessels transiting the Strait on July 6. The report indicated that the ships sustained significant damage, although no casualties were reported.

Shipping data released on July 7 showed that Japanese-owned supertankers carrying Saudi crude entered the Strait of Hormuz to leave the Gulf, joining several vessels that had resumed their journeys a day earlier after previously being stranded.

Despite the renewed movements, ANZ analysts noted that the recovery in oil shipments has been slower than anticipated.

"The initial rebound in tanker transits through the Strait of Hormuz has stalled, with vessel crossings remaining in single digits and no sustained recovery evident," they said.

Meanwhile, five sources familiar with the matter said Saudi Arabia is considering expanding the capacity of its crude oil pipeline to the Red Sea coast. The move would allow the kingdom—and potentially neighbouring countries—to transport larger volumes of oil without relying on the Strait of Hormuz.

Although Saudi Arabia recently cut the price of its crude exports to Asia by the largest margin in more than two decades, its oil remains more expensive than some competing supplies from other Gulf producers.

By Bakhtiyar Abbasov