Crude oil futures climbed on Friday as Iran formally laid out conditions for reopening the strategic Strait of Hormuz, a key chokepoint for global energy shipments. On Hyperliquid, WTI perpetual contracts rose to $77.67 per barrel, while Brent—the international benchmark—surged to $83. The move reflects persistent geopolitical tensions between Washington and Tehran, which have kept traders on edge despite a temporary pause in direct hostilities.
Iran's demands and the stalled talks
Negotiations between Iran and Oman, which had raised hopes of a diplomatic resolution, now face fresh hurdles. According to reports, Tehran has issued a formal list of prerequisites for restoring normal traffic through the strait. These include the complete removal of the US naval blockade, the lifting of all sanctions imposed on Iran, the release of frozen Iranian assets, and an end to US strikes against Iranian-aligned groups in the region.
The US, while not directly at the table, has been kept informed of the discussions. Earlier, Washington had signaled it might ease its blockade if a deal were reached. However, Iran's new demands have cast doubt on the likelihood of a swift reopening, prompting a fresh wave of buying in the oil market.
Supply risks and market context
The standoff comes at a time when supply-side risks are already elevated. The ongoing crisis in Yemen, where Houthi forces continue to disrupt shipping through the Bab el-Mandeb strait, has added another layer of uncertainty for tanker routes from the Gulf. Meanwhile, reports of depleted US weapons stockpiles and warnings from military officials about the risks of a prolonged air campaign have reinforced the view that a quick resolution is unlikely.
On the demand side, there are signs that China has stepped up purchases to rebuild its strategic petroleum reserves. Beijing's average daily imports in July exceeded 8.4 million barrels, a notable increase from the previous month, providing some fundamental support to prices.
Technical outlook for crude
From a technical perspective, crude oil had fallen sharply in late July, dropping from a high of $101.98 on July 23 to a low of $78.29 on August 5. That decline followed a de-escalation in US threats against Iran. Prices now sit below the 50-day exponential moving average, indicating that bearish momentum has dominated in the short term.
However, the latest rebound suggests that bulls are attempting to fill a fair value gap left on July 24. If buying pressure persists, prices could target the $95 level in the coming weeks. Conversely, a break below the $78.30 support would invalidate the bullish setup and could trigger further downside.
Market participants are closely watching diplomatic developments, as any sign of progress—or further deterioration—could drive the next major move. For now, the risk premium embedded in oil prices remains substantial, reflecting the fragile state of global supply chains.
This article is for informational purposes only and does not constitute financial advice.
