Key facts
- Oil prices surged nearly 5% amid uncertainty over the Strait of Hormuz reopening.
- Iran is demanding US concessions, including compensation, sanctions relief, and troop withdrawal, for reopening the Strait.
- US crude oil reserves have fallen to 298.7 million barrels, the lowest level since 1983.
- Bank of America warns of further oil price increases if the Strait of Hormuz remains closed.
- Unverified reports suggest Iran may have struck another tanker near Oman.
Oil prices climbed nearly 5% as Iran tempered expectations for a swift reopening of the Strait of Hormuz, demanding concessions from the United States. Simultaneously, America's crude oil reserves have fallen to their lowest level in over four decades, exacerbating market concerns.
Iran is reportedly in the final stages of a deal with Oman to reopen the vital shipping lane, but has set six demands for the US, including compensation, sanctions relief, and troop withdrawal. Reports of Iran allegedly striking another tanker near Oman remain unverified.
Adding to the supply-side worries, America's stockpile of crude oil has dropped to 298.7 million barrels, the first time it has dipped below 300 million since 1983. The US began the year with approximately 415 million barrels, with releases made to offset disruptions related to the Iran conflict.
Brent crude rose 5% to trade at $87.82, while US oil increased 5% to $82.28. The average price per gallon of gasoline in the US has also climbed back above $4. Bank of America has warned that oil prices could rise further this winter if the Strait of Hormuz remains closed.