Oil Rallies as Iran Adopts Offensive Stance Over Hormuz


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude and oil product futures rallied Monday (8/17) 
after Iran warned it was adopting a new offensive stance over the Strait of 
Hormuz, threatening an escalation of hostilities in the region unless its 
demands were met by the United States.

   NYMEX WTI crude for September delivery rose $2.10, or 2.55%, to settle at 
$84.50 bbl. ICE Brent crude for October delivery gained $2.35, or 2.65%, to 
close at $90.87 bbl.

   Downstream, NYMEX ULSD for September delivery climbed $0.1542, or 3.60%, to 
close at $4.4371 gallon. NYMEX RBOB for September advanced $0.0860, or 2.70%, 
to finish at $3.2701 gallon.

   By 3:25 p.m. ET, the U.S. dollar index slid 0.039 points to 99.52 against a 
basket of currencies.

   The upward momentum across oil and product futures came as senior Iranian 
officials announced a pivot in Iran's prior defensive posturing over the 
Hormuz, in a bid to force Washington's hand in ending a maritime blockade on 
Iranian ports. The White House countered Tehran's move by vowing to double down 
on its maximum pressure campaign on Iran, signaling the potential for 
heightened ideological and military clashes.

   Diplomatic lines between Washington and Tehran have been strained since the 
breakdown of a ceasefire agreed in July, with Iranian officials dismissing 
third-party mediation as ineffective. Tehran is demanding an immediate end to 
the U.S. naval blockade, full unfreezing of its assets, formal war reparations, 
and unhindered oil exports.

   Washington, in response, wants Tehran stop targeting commercial shipping on 
the Hormuz, and abandon any plans to collect transit tolls from passing 
vessels. U.S. President Donbald Trump threatened on Monday to expand military 
strikes into Oman -- Iran's diplomatic ally and key regional mediator -- if 
Muscat facilitates Iranian actions on the waterway.




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