(Bloomberg) — Oil erased a decline as Yemen’s Houthi militant group issued a fresh threat against Middle East shipping, tempering optimism over US-Iran talks.
Brent traded near $80 a barrel, while West Texas Intermediate was around $76 after losing more than 10% in the prior two sessions. Houthi spokesperson Yahya Saree said the group would escalate attacks on Saudi vessels in the northern Red Sea — a key workaround route during disruption in the Strait of Hormuz.
Oil had been falling this week on optimism a deal might be reached to reopen Hormuz, potentially freeing up Persian Gulf supplies. Qatar said Tuesday that an interim proposal had been drafted, and both Washington and Tehran signaled progress in talks to reopen the waterway.
Separately, Axios reported the US, Iran and Oman were nearing an interim, 60-day accord to reopen the conduit, with Washington aiming for an announcement later Wednesday. The proposal would see no tolls or fees paid, with inbound vessels using a northern lane, and outbound traffic a southern one.
Oil has slumped over the past two weeks as US President Donald Trump said he’d postponed new strikes on Iran to give talks more time. Yet even if a short-term deal to normalize commercial shipping is reached, it might still fail to end the war or resolve Trump’s concerns about the Islamic Republic’s nuclear program.
Meanwhile, the Iran-backed Houthis continue to pose a threat in the Red Sea, which has become a major export route for Saudi barrels during the war. People familiar with the matter said this week that the kingdom had held talks with the militants through Omani mediators in an effort to prevent the conflict from widening. They said the OPEC member is continuing to prepare military options should negotiations fail.
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–With assistance from Nicholas Lua, Gabriel Levin and Alex Longley.
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