Oil prices rise

Oil prices rose on Thursday as investors remained cautious on the outcome of Iran-Oman talks and whether they will restore flows via the Strait of Hormuz, while reports of attacks on Saudi tankers in the Red Sea and Gulf of Aden renewed supply tensions.

Brent crude futures gained 48 cents, or 0.60 percent, to $79.93 a barrel by 0755 GMT. US West Texas Intermediate futures added 29 cents, or 0.39 percent, to $75.51 a barrel.

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“Traders still remember the short-lived Memorandum of Understanding signed in June, so there is understandable anxiety that any new deal could prove equally fragile,” said Tim Waterer, chief market analyst at KCM Trade.

Iran and Oman have reached an understanding on the geographic coordinates for a shipping route through the Strait of Hormuz, and a joint announcement is being finalised, provided certain third parties did not interfere, Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said on Wednesday.

A proposed deal between Iran and Oman to help end the US-Iran conflict would give Tehran control over ships entering the Gulf through the Strait of Hormuz, a senior Iranian source and two regional officials told Reuters on Wednesday, one of the biggest concessions yet to Iran.

Before the conflict began in late February, the Strait of Hormuz handled about one-fifth of global daily oil and liquefied natural gas supplies.

“Until we see sustained, verifiable increases in volumes, the market will continue to price in a degree of supply risk,” Waterer added.

Gulf countries’ crude oil and condensate exports were largely steady in July and remained about 40 percent below pre-war levels, shipping data showed.

Iran has warned Gulf states that any new US attack on its territory would trigger retaliation against critical energy infrastructure across the region, according to five sources, as Tehran seeks to raise the cost of military action by threatening Washington’s closest regional allies.

Yemen’s Iran-aligned Houthis said on Wednesday they had launched a missile attack on a Saudi oil tanker off the coast of the kingdom’s Red Sea port city of Yanbu and another missile attack on a Saudi oil tanker in the nearby Gulf of Aden.

There was no confirmation from Saudi Arabia on either incident.

Meanwhile, Saudi Arabia has set the September Arab Light crude oil official selling price to Asia at $2 a barrel below the Oman/Dubai average, down from the previous month, a pricing document reviewed by Reuters showed on Thursday.

Elsewhere, the Ukrainian military hit two oil refineries deep inside Russia, Ukraine’s President Volodymyr Zelenskiy said on Telegram on Thursday.