Oil prices rise despite Iran’s proposal to reopen Strait of Hormuz | Oil and Gas News

Brent crude rises more than 1 percent despite Tehran’s offer to reopen waterway in exchange for deferral of nuclear talks.

Oil prices are continuing to climb despite Iran’s proposal to end its effective blockade of the Strait of Hormuz in exchange for deferring nuclear negotiations with the United States.

Brent crude, the international benchmark, rose more than 1 percent on Tuesday as Tehran’s offer failed to assuage traders’ concerns about the blockade of the waterway critical for global fuel supplies.

Brent stood at $109.42 per barrel as of 03:30 GMT, up 11 percent from Tuesday last week, and the last time the benchmark closed below $100.

The latest rise came as Iranian Foreign Minister Abbas Araghchi shared proposals to reopen the strait with interlocutor Pakistan amid stalled peace negotiations between Washington and Tehran.

The US has not commented publicly on the Iranian proposal, which would set aside the thorny issue of Iran’s nuclear programme to a later date.

Iran’s threats against commercial shipping have reduced maritime traffic in the strait to a trickle over the past two months, paralysing a significant portion of the world’s oil and natural supplies.

Only eight vessels crossed the strait on Sunday, down from 19 transits the previous day, according to ship tracking data monitored by maritime intelligence platform Windward.

Before the US and Israel launched their war on Iran on February 28, an average of 129 vessels passed the strait each day, according to the United Nations Trade and Development (UNCTAD).

The blockade and attacks on regional energy infrastructure have reduced global oil production by 14.5 million barrels per day, according to a Goldman Sachs estimate.

Shipping and logistics experts have warned that it will likely take months for energy flows to return to normal even if the US and Iran reach a deal to end the war, pointing to the backlog of unloaded oil and gas, damage to infrastructure and the need to clear the waterway of Iranian mines.