Hormuz Deadlock: Where oil prices could head next as prospects for an imminent deal fade

Livestream Menu Oil price gains remained in check on Monday, even after Washington's latest hints of an imminent U. S.-Iran deal to reopen the Strait of Hormuz failed to deliver. Market moves won't be so "benign" if the current deadlock runs into next week, Jefferies economist Modupe Adegbembo told CNBC. Factors such as China's rising crude imports and Houthi attacks on Saudi infrastructure could also push prices higher if the Strait remains closed. A view of commercial cargo vessels and crude oil tankers are anchored in the Gulf of Oman, off the coast of Muscat, Oman, on June 21, 2026, as they prepare to transit through the critical Strait of Hormuz. Shady Alassar | Anadolu | Oil prices remain below their recent peaks even as prospects for a quick reopening of the Strait of Hormuz fade, a disconnect analysts warn may not last. Brent crude futures ended last week down more than 7% following signals from Washington that an agreement with Tehran to unblock the vital maritime chokepoint was in sight. An agreement is yet to materialize, with prospects for a deal appearing to deteriorate over the weekend. Tehran is now adamant that Washington must adhere to several conditions before the strait can reopen. President Donald Trump, meanwhile, has signaled a shift in strategy, telling news outlet Axios on Sunday that Washington was "low-keying it" and hinting the administration would rely on mounting economic pressure on Tehran rather than immediate fresh military strikes. International benchmark Brent crude was closing in on $88 a barrel in early trading on Tuesday, up from around $83 at the end of last week. That rise still leaves prices well below last month's surge above $100 a barrel and the peak above $110 recorded in May. Why analysts think crude oil prices could rise further Energy markets drew short-term confidence from indications that negotiations between Iran and Oman over a temporary shipping route through the strait are continuing, alongside expectations that near-term military escalation between the U. S. and Iran may be held in check. This would be consistent with much higher prices, possibly in the region of $120-140 per barrel based on historical form." There are mounting questions over how long wider market factors — such as alternative export routes bypassing the strait, lower demand, a surge in production and a temporary slump in Chinese oil imports — can continue to cushion against supply shortfalls. China "singlehandedly balanced the market in May with its cut-back in [oil] imports," Amrita Sen, founder and director of research at consultancy Energy Aspects, told CNBC's "Morning Call" on Friday.