Oil recovers part of Monday's losses on supply risk, Brent at $84.39

August 4, 2026 at 08:09 AM2 min

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Oil prices edged higher on Tuesday, partially recovering from the previous session's sharp sell-off, as renewed concerns over supply disruptions from the Strait of Hormuz outweighed easing US-Iran tensions. Brent crude rose 0.7% to $84.39 a barrel, while WTI added 0.7% to $80.95, after Monday's drops of nearly 7% and over 5%, respectively. The rebound came even as Tehran denied any diplomatic talks with Washington, keeping investors on edge.

Oil Price Rebound

Brent crude added 0.7% to settle at $84.39 per barrel on Tuesday, while U.S. West Texas Intermediate rose the same margin to $80.95, after Monday’s rout saw both benchmarks tumble 6.9% and 5.3% respectively. Tim Waterer, chief market analyst at KCM Trade, noted that ‘any new missile strikes or attacks on vessels near the Strait of Hormuz could quickly propel oil prices higher again.’ The market remains highly volatile as traders weigh competing signals on supply security.

Diplomatic Uncertainty

The sell-off on Monday was triggered by President Donald Trump’s statement that the United States would refrain from new strikes on Iran, pending a possible resumption of negotiations to end the conflict and resolve the situation around the Strait of Hormuz. However, Iranian Foreign Ministry spokesman Esmail Baghaei said on Monday that no talks are underway or planned between Tehran and Washington, reigniting skepticism over a diplomatic resolution. The conflicting messages have kept a floor under oil prices, as any perceived escalation could quickly reverse sentiment.

Strait of Hormuz Risks

The Strait of Hormuz remains the focal point of geopolitical risk for oil markets. The United States insists that a June memorandum guarantees free navigation, while Iran claims it retains the right to regulate passage independently. Barclays estimated net oil and product exports through the strait rose to 4.2 million barrels per day in the week ending July 31, up from 3.2 million the prior week, though shipping data showed disruptions persist. On Tuesday, the United Kingdom Maritime Trade Operations (UKMTO) reported a fresh incident, with a cargo vessel struck by an unknown projectile about 20 nautical miles northeast of Al Khasab, Oman. Waterer added that ongoing tensions are raising insurance costs and forcing ships to reroute, sustaining a geopolitical premium in global oil prices.