Oil Prices Hit Three-Week High as U.S.-Iran Hormuz Standoff Drags On

Oil prices extended gains for a fourth consecutive session, reaching a near three-week high as a diplomatic standoff between the United States and Iran over the Strait of Hormuz stoked fears of prolonged global supply disruptions. West Texas Intermediate (WTI) crude futures rose 0.45% to $85.32 a barrel, according to pricing data reported by Investing.com.

Diplomatic Deadlock Fuels Supply Fears

The upward price momentum is rooted in geopolitical tensions after an interim deal signed in June between the two nations lapsed this week. U.S. President Donald Trump said on Tuesday that no talks with Iran were taking place or scheduled, the source material stated.

Tehran confirmed that no dialogue was underway and disputed U.S. claims that the critical waterway was open. According to the report, Iran asserts the strait will remain shut until the U.S. meets the conditions of the now-expired agreement. Neither side has signaled any intent to renew the ceasefire, heightening market uncertainty.

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Market Impact and Inventory Data

The conflict is having a tangible effect on energy flows, with shipping data showing commercial transit through the Strait of Hormuz remains at a fraction of pre-war levels. The waterway is a vital chokepoint through which approximately 20% of the world's oil consumption previously passed.

Adding to supply tightness, data from the American Petroleum Institute (API) indicated a small contraction in U.S. crude inventories last week. This development comes as the U.S. Strategic Petroleum Reserve has already shrunk to its lowest level in more than 40 years due to the ongoing conflict, limiting the ability to offset further disruptions.