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Oil prices surged sharply on Thursday, reclaiming some lost ground as the countdown to a Strait of Hormuz agreement enters its final phase. However, repeated delays are fueling investor anxiety over whether the United States and Iran can successfully secure a deal. The latest reports indicate that an agreement between Iran and Oman regarding a new navigational corridor in the Strait of Hormuz—often described as a temporary transit or passage arrangement—is nearing completion. Both sides have reached a consensus on the geographic coordinates of the proposed route, and a joint statement is in its final review and drafting stages, with an announcement expected in the coming days. This suggests that the negotiation process is not being dominated by the United States. President Donald Trump stated on Thursday that no agreement has been reached on the Strait of Hormuz, but added that the waterway is "somewhat" open at present, claiming it is under U.S. control. While various parties are pushing to finalize the pact, Gulf nations, including Saudi Arabia and Iraq, are increasing efforts to guard against the risk of escalating tensions. Saudi officials have cited multiple intelligence reports indicating that Iran is planning attacks on the kingdom, with the disclosed threat signals potentially pointing to an internal "power struggle" within Iran. Turkey, Saudi Arabia, and Pakistan are scheduled to sign a joint defense agreement in Saudi Arabia on Friday. Kpler tracking data shows that total confirmed clearance volumes in the Middle East Gulf region have accelerated this week, coinciding with diplomatic progress ahead of a potential US-Iran deal. Based on satellite imagery, port intelligence, and cargo-level data, Kpler's aggregate clearance volume—which includes non-Iranian crude and condensate shipments through the Strait of Hormuz plus net exports from the Gulf of Oman—reached 4.32 million barrels per day between July 29 and August 4. Separately, reports indicate that over the past two months, the United Arab Emirates has transported the highest volume of crude oil through the Strait of Hormuz among all producing nations. Since early June, the Abu Dhabi National Oil Company has conducted an unprecedented seven tenders, selling a cumulative total of over 130 million barrels of crude. This move has provided a much-needed buffer for the global energy market, which has been strained by a historic energy crisis. On one hand, supply is tightening due to the blockade of the Strait of Hormuz, with the Yemeni Houthis' closure of the Bab el-Mandeb strait posing significant challenges for Saudi Arabia's southern export routes. On the other hand, the flow through the Strait of Hormuz is noticeably higher than previously tracked data indicated, meaning the supply situation requires further monitoring. The rebound in oil prices on Thursday suggests that capital, which had been pricing in an agreement early in the week, is now hedging against the risk of a breakdown that could lead to escalating tensions. Oil prices are at a critical juncture, facing a directional choice. Risk management is crucial during this key timeframe, and cautious participation is advised.
Daily Snapshot
WTI crude oil futures settled up $2.07, or 2.75%, at $77.29 per barrel. Brent crude oil futures settled up $3.04, or 3.83%, at $82.49 per barrel. INE crude oil futures settled up 3.34% at 526.7 yuan per barrel.
The U.S. Dollar Index rose 0.25% to 99.94. The Hong Kong Stock Exchange's USD/CNY rate edged up 0.03% to 6.7337. The U.S. 10-year Treasury note fell 0.42% to 108.45. The Dow Jones Industrial Average dropped 0.85% to 53,885.1.
Recent Key Developments
Saudi Arabia Cuts September Official Selling Prices for Asia to Over Five-Year Low, Hormuz Talks Influence Regional Pricing
Saudi Aramco's official pricing document shows the September official selling price for Arab Light crude to Asia was set at a discount of approximately $2 per barrel against the Oman/Dubai average, the lowest level since June 2020. This follows a discount of $1.50 per barrel in the previous month, which was the steepest cut in over two decades. Market participants are closely monitoring the week's negotiations between Iran and Oman for signs of a potential reopening of the Strait of Hormuz. Brent crude futures have fallen back to levels seen in mid-June when a temporary US-Iran deal was reached. Meanwhile, the official selling prices for Arab Medium and Arab Heavy crude grades for September were raised by approximately $1.25 per barrel. Saudi Aramco also lowered its official selling prices for Europe, the United States, and the Mediterranean region. These adjustments in price differentials across different grades and regions reflect diverging demand patterns and competitive dynamics. Alongside the price release, Saudi Aramco has asked its Asian customers to submit lifting schedules for cargoes loaded at Ras Tanura by August 7, including alternative plans for loading at Yanbu or Sidi Kerir ports in the event of a Strait closure. The two alternative ports have limited availability and offer only Arab Light crude. Focus now shifts to the impact of the eventual Hormuz agreement on spot premiums in the Middle East and the subsequent adjustments in Asian buyers' procurement pace.
Hormuz Agreement in Countdown: A Genuine Compromise or a Feint, Oil Markets Await Final Verdict
Iran stated on Wednesday that the draft agreement with Oman regarding the Strait of Hormuz has entered its "final stage," while President Trump indicated a deal could be announced within the week. This key waterway, through which approximately 20% of the world's oil trade passes, could be reopened, offering a potential reprieve for the global economy and energy markets strained by geopolitical risk premiums. However, the conditions for the agreement's implementation are exceptionally complex. Iran demands the lifting of the U.S. blockade on its ports, while the Trump administration has previously opposed any arrangement that would strengthen Iran's control over the Strait. Fundamental disagreements over management rights and transit fees remain unresolved, with Iran insisting on not returning to the pre-war state of the waterway as a fully international channel. Informed officials revealed that the draft has been finalized by negotiators and is awaiting final approval from Iran's Supreme Leader, Ayatollah Ali Khamenei. However, the plan is seen only as a temporary resolution mechanism and is linked to the June US-Iran ceasefire and waterway reopening agreement, which ultimately collapsed. This history has significantly undermined market confidence in the current push. President Trump told media Tuesday evening that progress could be made "tomorrow or the day after," but simultaneously issued signals ranging from threats of large-scale strikes to diplomatic support. This inconsistent messaging makes it difficult for traders to price risk, causing Brent crude to briefly dip on the news before recovering slightly, oscillating around the $80 per barrel mark, well below the peak levels seen during the conflict. The situation in the Red Sea is also deteriorating simultaneously. The Yemeni Houthi group claimed it launched missile attacks on a Saudi oil tanker, and the UK Maritime Trade Operations confirmed an explosion near a vessel in the Gulf of Aden. The Houthis last month declared a closure of the Bab el-Mandeb strait to Saudi-linked shipping, adding another chokepoint to the already fragile global energy transport chain. Furthermore, a ceasefire between Israel and Hezbollah in southern Lebanon appears to be breaking down, with talks in Rome ending prematurely due to "ground events."
UAE Leads Crude Oil Shipments Through Strait of Hormuz, ADNOC's Innovative Sales Strategy Provides Market Buffer
Over the past two months, the United Arab Emirates has transported the highest volume of crude oil through the Strait of Hormuz among all producing nations. This move has provided a crucial buffer for the global energy market, which has been severely impacted by a historic energy crisis. According to anonymous trading sources, the Abu Dhabi National Oil Company has conducted an unprecedented seven tenders since early June, selling a cumulative total of over 130 million barrels of crude. This volume is larger than the monthly crude oil consumption of Japan, Asia's third-largest consumer. This robust series of export operations has been instrumental in stabilizing the global crude market. On Thursday, the global crude benchmark, Brent, was trading around $79 per barrel. While the market had anticipated a more severe shortage and a price spike, the supply from the UAE has effectively hedged against that risk. Sina is a major cooperation platform for futures account opening, ensuring safety and efficiency.
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