International oil prices continue their recent upward momentum, following U.S. President Donald Trump's new set of stringent demands on Iran, which has further clouded the prospects for an agreement to reopen the critical Strait of Hormuz waterway. Brent crude oil is moving toward $90 per barrel, marking a roughly 13% increase from a week ago.

Trump stated that in "any and all" future negotiations, he will demand compensation from Iran for the deaths caused by its actions in the conflict. This comes after Tehran also requested reparations for the war. The hardening of positions makes it increasingly unlikely that the U.S. and Iran will reach a deal to restore vessel passage through the world's most vital energy transit chokepoint. Before the war erupted in late February, approximately one-fifth of the global oil and gas flow passed through the Strait of Hormuz.

Where to start

Ole Hansen, head of commodity strategy at Saxo Bank, commented, "Both Trump and Iran are making demands that they know full well the other side cannot and will not accept. This essentially means the Strait of Hormuz could remain closed for an extended period. In this scenario, trading the oil market with a bearish mindset makes little sense."

Over the past several months, crude oil prices have experienced violent swings amid the turmoil in the Middle East. As the situation deteriorates further, the rally in fuel prices has become even more pronounced. Diesel has been hit particularly hard, as the Russia-Ukraine conflict is also squeezing supply, causing the European diesel benchmark to more than double in price since the start of the year.

On Tuesday, reports emerged of a fire at the Komsomolsk refinery, owned by Russia's Rosneft in the Khabarovsk region, though the company stated production operations were not disrupted. In a separate local statement, drone debris also sparked a fire at an industrial facility in Russia's Orenburg region, where the Orsk refinery, owned by ForteInvest, is located. Additionally, a refinery in Libya came under attack.

Trump has imposed new demands on Iran, including compensation for casualties from its actions, as well as reparations for deaths and related losses in Lebanon, Syria, Yemen, and Gaza.