Brent holds at $88.28 as US-Iran talks offset Houthi blockade threat

Brent crude futures were up 18 cents, or 0.2%, at $88.28 a barrel by 1222 GMT, retracing from an intraday high of $91.42, the strongest level since 11 June. US West Texas Intermediate moved the other way, down 34 cents at $82.15 after peaking at $85.39. The pullback follows a run higher driven by fears over shipments through the Strait of Hormuz.

The move down from the peak tracks reports of renewed diplomacy. Reuters reported that mediators have delivered a proposal to Iran for a 10-day ceasefire aimed at reviving a previous interim agreement, citing a senior Iranian official. That optimism is running against a hard supply picture: tanker traffic through Hormuz has thinned sharply, with LSEG data showing just four vessels transiting on Sunday, down from eight the day before. The Islamic Revolutionary Guard Corps said two oil tankers were immobilised by explosions on a southern route through the strait, a claim Reuters has not independently verified.

The chart below shows Brent over recent months, against which the current move around the $88 to $91 band can be read.

What this means for UK buyers

Brent feeds directly into the gas and power curves you hedge against, so a stalled Hormuz recovery keeps upward pressure on the forward months. The strait carried roughly 20% of global oil supplies before the conflict, and analysts at ANZ note the anticipated recovery in shipping has effectively stalled with transit volumes in single digits. For buyers, the near-term signal is volatility rather than a clean trend.

Watch these points as the situation develops:

• Hormuz transit counts (four vessels Sunday, versus eight Saturday)
• Brent front-month direction around the $88 to $91 band
• Progress or collapse of the proposed 10-day ceasefire
• Any Houthi move to close the Red Sea route
• Gulf export flows, which hit a five-month high in early July

The wider context matters for judging scale. Gulf nations ramped up crude and condensate exports in the first half of July to levels not seen since before the conflict began in late February, though the BBC reports flows through the strait are now slowing as fighting escalates. The Guardian noted earlier optimism had briefly pushed prices to a two-week low, a reminder of how quickly the diplomatic read can flip.

If the ceasefire proposal holds, expect the risk premium to unwind and the curve to soften. If Hormuz transit stays in single digits or the Houthis act on the blockade threat, the front months firm again. Buyers with renewals in the coming weeks should treat this as a window to watch closely rather than commit blind, and hold flexibility where contract terms allow.