Oil hits new one-week high as supply disruptions outweigh Strait of Hormuz talks

By Scott DiSavino

Aug 11 (Reuters) – Oil prices edged up to a fresh one-week high on Tuesday as the market focused more on supply disruptions in the Middle East and Russia than on signs of progress in talks between Oman and Iran over shipping through the Strait of Hormuz.

Brent futures were up 95 cents, or 1.1%, to $88.67 a barrel at 1:15 p.m. EDT (1715 GMT), while U.S. West Texas Intermediate (WTI) crude rose $1.04, or 1.3%, to $83.17.

On Monday, both benchmarks jumped about 5% to their highest closes since July 31 as hopes for a peace deal between the U.S. and Iran faded.

Pakistan said on Tuesday the U.S. and Iran were close to “some sort” of deal, and fellow mediator Qatar said talks on managing the Strait of Hormuz were at an advanced stage, despite reports of new attacks on shipping in regional waters.

The comments offered some hope that Tehran and Washington can end a stalemate that has in effect blocked the vital waterway. About 20% of global oil supply passed through the strait before the start of the Iran war on February 28.

The secretary of Iran’s Supreme National Security Council, Mohsen Rezaei, however, said on Tuesday that the Strait of Hormuz will remain closed as long as the U.S. does not change its behavior and accept Iran’s conditions.

“Another setback in negotiations could send prices higher while credible progress toward restoring shipping flows would likely reverse some of the latest gains,” analysts at consulting firm Gelber & Associates said in a note.

Shipping data showed that traffic through the Strait of Hormuz dropped to six vessels on Monday, compared with a 10-day average of about 11 vessels.

Elsewhere in the Middle East, four crew members were killed in an attack by Iran-backed Houthis on a small cargo ship in the Bab el-Mandeb strait between the Red Sea and the open Indian Ocean on Tuesday, Yemen’s transport ministry said, while sources reported a missile attack on a container ship off Pakistan in a suspected U.S. strike.

SUPPLY DISRUPTION IN LIBYA

The Abu Dhabi National Oil Company is offering spot crude in a tender, its eighth issued since the start of June as the UAE state oil company works to move oil from inside the Strait of Hormuz, trade sources said.

In Libya, renewed violence in the strategic city of Zawiya has once again disrupted the oil industry, with state oil firm NOC saying it could declare force majeure if drone attacks on energy assets in the city continued. Libya is a member of the Organization of the Petroleum Exporting Countries (OPEC).

In Europe, the Ukrainian military said on Tuesday it attacked an oil refinery in the Russian city of Orsk, the second-largest city in the Orenburg region and an important industrial hub.

The combination of Ukraine’s attacks on Russian energy infrastructure and the Iran war has limited global supplies and boosted global energy prices — Brent futures are up about 44% so far this year.

Russia was the world’s third-biggest crude oil producer behind the U.S. and Saudi Arabia in 2025, according to U.S. energy data, and is a member of the OPEC+ group of countries, which includes OPEC and allies.

U.S. OIL INVENTORIES

The oil market was waiting for weekly storage reports from the American Petroleum Institute trade group later on Tuesday and the U.S. Energy Information Administration on Wednesday.

Analysts estimated energy firms pulled 0.5 million barrels of crude from storage during the week ended August 7.

If correct, it would be the second time stockpiles had declined in three weeks. Stockpiles increased by 3.0 million barrels in the same week last year and have experienced an average increase of 3.1 million barrels over the past five years (2021 to 2025). [EIA/S] [API/S]

(Reporting by Scott DiSavino in New York anAnushree Mukherjee and Ishaan Arora in Bengaluru; Editing by David Goodman, Mark Potter and Paul Simao)