Hormuz shipping falls to 7 vessels as US-Iran talks stall

Shipping traffic through the Strait of Hormuz has dropped sharply as hopes for a diplomatic resolution between the United States and Iran continue to erode, sending oil prices surging amid renewed fears of prolonged supply disruption.

Vessel Crossings Plunge

Confirmed commodity vessel crossings through Hormuz fell from 15 on Friday to 11 on Saturday and just six on Sunday, according to data from shipping analytics firm Kpler. On Monday, only seven vessels transited the waterway, well below the recent 10-day average of roughly 12 and a fraction of the approximately 98 commodity carriers that used the strait daily before the conflict began in February.play1037+2

The decline followed the collapse of expectations that Iran and Oman were nearing an agreement to reopen the strait, which carries about one-fifth of global oil and liquefied natural gas supplies. Iran's foreign ministry said Monday that Oman talks had not been finalized and reiterated that a full reopening would require an end to U.S. sanctions, withdrawal of military threats, and compensation for war damage. Tehran has also ruled out direct talks with Washington, citing alleged violations of an interim agreement reached in June.investing+1

Oil Prices Surge on Supply Fears

Brent crude futures settled up $4.17, or 4.99%, at $87.72 a barrel on Monday — the largest single-day percentage gain since July 29. On Tuesday, prices continued climbing, with Brent trading above $89 as additional supply concerns compounded the Hormuz disruption.aa+2

President Donald Trump on Monday declined to elaborate on next steps in negotiations with Iran while signaling that Washington retains the ability to pursue military escalation if talks fail. "You'll find out," he told reporters when asked what would follow, after previously describing the latest negotiations as Iran's "last chance". On Truth Social, Trump demanded Iran pay compensation for "all of the people that they have killed" over the past 50 years.investing+1

Bloomberg reported that Trump has shifted from touting an imminent peace deal to adopting a "low key" posture, betting that economic pressure from the U.S. naval blockade will force Tehran's hand.energynow

Wider Supply Risks Mount

Beyond Hormuz, multiple threats are pressuring global oil supply. Iran-backed Houthi forces claimed attacks on Saudi Aramco's Jazan refinery, delaying its 400,000-barrel-per-day restart until August 30. The United Arab Emirates reported 15 of its vessels have been attacked while transiting Hormuz since the conflict began. In Libya, drone strikes on oil facilities in Zawiya prompted the National Oil Corporation to warn it may declare force majeure and halt refinery operations.play1037+1

Meanwhile, the U.S. Strategic Petroleum Reserve fell by 6.1 million barrels last week to 298.7 million barrels — its lowest level since January 1983 — as part of a coordinated international release of 400 million barrels aimed at addressing supply disruptions.aa+1

"Trump may believe he has time to let the pressure on Iran build," Bloomberg's Grant Smith wrote. "With fuel buffers dwindling ahead of winter, the oil market may not afford him as much as he thinks".energynow