Crude Oil Surges Amid Delaying U.S.-Iran MoU, Strait Of Hormuz Blockade

(RTTNews) - Crude oil prices have soared on Tuesday, extending the gains from yesterday's session as signing of the U.S.-Iran Memorandum of Understanding to discuss ways to end the gulf crisis gets delayed. In addition, global energy watchdog warned of accelerating crude oil inventory depletion.

WTI Crude Oil for July month delivery was last seen trading up by $1.57 (or 1.70%) at $93.73 per barrel.

The U.S.-Iran war which started on February 28, entered day number 95 today.

Negotiations held over the past few days between the U.S. and Iran to halt the war is yet to result in an agreement.

Iran's Mehr news reported that Iran is reviewing the proposed agreement with the U.S.

As a result of the delay, the Strait of Hormuz remains shut largely for oil and energy trade.

Last week, an Axios report stating that a Memorandum of Understanding has been prepared for U.S. President Donald Trump's final approval, calmed markets, easing oil prices.

On Friday, Trump stated that he would take a final call on the proposal after discussing with his senior aides but no breakthrough announcement was made.

Yesterday, CBS News reported that Trump made a few edits to the draft proposal on areas centering around the Strait of Hormuz and the removal of Iran's highly enriched uranium stockpiles.

Trump assured that talks with Iran continued at a rapid pace and reiterated that a deal would be reached soon which will be beneficial for the U.S.

Israel continued its attacks on Lebanon following orders from Israeli Prime Minister Benjamin Netanyahu to expand the attacks deeper into Lebanon.

Voicing support to Lebanon, Iran paused exchange of communications with the U.S., compelling Trump to separately talk to Netanyahu and representatives of Lebanon's Hezbollah militants.

Later, Trump announced both sides have agreed to halt the mutual attacks.

Iran's Parliamentary Speaker Mohammad Bagher Ghalibaf warned that if Israeli attacks on Lebanon continue, not only will Iran suspend the ongoing talks with the U.S., but vowed that it will stand against the Zionist regime.

Ghalibaf stressed that a U.S.-Iran agreement should involve halt to attacks on Lebanon.

Pakistan's Foreign Minister Ishaq Dar had a telephone call yesterday with Iran's Foreign Minister Abbas Araghchi where Dar urged Iran to continue the ongoing ceasefire with the U.S.

Dar cautioned that a breakdown in the ceasefire could precipitate the current gulf crisis further.

Today, once again through Truth Social, Trump reaffirmed that U.S.-Iran dialogue process has been going on for the past four days though he was uncertain on how it will end. Trump openly urged Iran to strike a deal.

Despite these assurances, the ongoing blockade over the Strait of Hormuz has increased the concerns of investors.

Meanwhile, coinciding with the onset of peak summer fuel demand along with rapidly depleting crude inventories, the Head of Oil Industry and Markets Division of the International Energy Agency, Toril Bosoni warned that global oil markets could enter a "red zone" in July and August.

According to the IEA, global oil inventories fell by over 250 million barrels between March and May.

Traffic through the Strait of Hormuz continues to remain closed keeping supply concerns alive.

Iran's Islamic Revolutionary Guards Corps stated today that 24 vessels transited through the strait over the past 24 hours after obtaining appropriate permission from Iranian authorities.