Oil holds above 100 dollars as Hormuz talks slip and a Saudi pipeline stays shut

Talks between Iran and other Gulf powers on a shipping deal for the Strait of Hormuz were postponed, and oil prices jumped, while Houthi attacks on Saudi Arabia continued¹. Al Jazeera reported that another attempt at a temporary Hormuz arrangement between Iran and Oman was set back by a lack of consensus². Oil futures were beyond 100 dollars a barrel even as Washington said it was clearing Hormuz traffic⁹.

The supply side tightened separately. Crude jumped as the shutdown of a Saudi pipeline deepened the energy crisis³, with Brent nearing 108 dollars after the pipeline was hit⁴. The New York Times reported Brent roughly 50 percent higher than before the widening conflict⁵. US diesel pushed to a new all-time high after the pipeline was shut and the Hormuz talks were postponed⁸.

Why it matters to investors

The chokepoints are narrowing at both ends of the Red Sea. Houthi forces deployed on the Hanish islands, 160 kilometres north of Bab el-Mandeb, after government-allied forces withdrew¹⁰; escalating attacks in the area have pushed oil above 100 dollars a barrel⁶. In the Strait of Hormuz, Iran expanded its shipping blacklist to 77 vessels¹², and the IRGC said an oil tanker hit mines and caught fire near the strait after entering what it called restricted waters¹¹.

The official line and the tape are not aligned. US Energy Secretary Chris Wright said the pipeline bypassing Hormuz should be back online “soon”⁷, but also said he had no exact time frame for a restart and was in contact about it⁸. Bloomberg Economics’ Ziad Daoud said prolonged disruption could tighten global energy supplies further³. Goldman’s co-head of global commodities research, Daan Struyven, said widening shipping disruptions had become a materially greater factor⁴, with 120 dollar oil described as back on the table⁴.

What to watch

Whether the Oman channel reopens. The postponement was procedural rather than final, and a restored partial traffic deal for Hormuz is the single biggest downside risk to the current price^1,2.

Whether the Saudi line restarts on the timetable Washington implies, since the gap between “soon” and no stated date is what the diesel market is trading^7,8. And whether Houthi territorial gains around Bab el-Mandeb continue, because that route is the alternative to Hormuz rather than a separate problem^6,10. Diplomacy and fighting are running at the same time: a US commander met Saudi leadership as the widening conflict threatened oil markets⁵.