Oil prices are trading higher for a fourth consecutive day, despite President Trump's assertion that there are no ongoing talks with Tehran. This situation leaves the conflict in the Middle East and the control of the Strait of Hormuz in a state of limbo, creating significant uncertainty for oil markets. According to Bloomberg's managing editor, the situation has devolved into what an expert described as a "war of attrition," with shipping levels in the strait remaining significantly below pre-war levels.
Adding to the regional tensions, the UAE recently cut off financial assets with Iran in response to alleged missile attacks, which Iran denies. This marks the first time Iran has targeted the UAE since May, further escalating tensions. The current situation suggests a prolonged struggle without clear resolution, with conflicting signals on the status of the Strait of Hormuz. While President Trump claims the strait is open, Iran maintains it is shut.
Despite the perceived closure, some oil shipments are still passing through. Before the war, approximately 50 million barrels of crude and 5 million barrels of other products transited the strait daily. Currently, about 5 to 6 million barrels per day are observed passing through, with an additional 2 million barrels per day moving quietly with AI systems disengaged. Furthermore, 3 to 4 million barrels per day are being transported via pipeline systems through the Red Sea. This indicates that the situation, while serious, is not as dire as it might appear, with around 11-12 million barrels per day of crude still moving, although refined product movement remains almost at zero. There is a high likelihood that Iranians will attack U.S. interests.
