U.S. oil rises above $83 a barrel as Iran says Strait of Hormuz won’t open until conditions are met

Oil prices rose Tuesday after an Iranian official said the Strait of Hormuz will not reopen until Tehran’s conditions are met.

U.S. West Texas Intermediate futures were 1.4% higher at $83.27 per barrel by 11:53 a.m. ET. Brent crude, the international benchmark, was up 1.3% at $88.85 per barrel.

The secretary of Iran’s Supreme National Security Council said Hormuz will remain closed if the U.S. does not meet Tehran’s conditions, according to Reuters.

U.S. oil had risen as much as 3% earlier in the day after President Donald Trump demanded that Iran pay reparations to the U.S., dimming prospects for an agreement.

Trump on Monday extended its suspension of a shipping law restricting the transport of goods between American ports to U.S. vessels, while narrowing the waiver only to vessels hauling certain energy resources.

The move came after data showing U.S. government crude oil stockpiles have fallen to their lowest level in more than four decades

Traders are meanwhile assessing the latest contradictory statements coming from Washington and Tehran, with President Donald Trump stating the U.S. has “100%” control of the Strait of Hormuz.

A fresh sticking point has emerged over the payment of reparations, which are now being demanded by both sides over claimed damages.

“The oil market remains very headline-driven, which leaves prices whipsawing. The latest bout of optimism is quickly fading,” ING strategists wrote in a Tuesday note.

“Current rhetoric suggests any potential deal is still some way off, meaning risks remain skewed to the upside for oil prices.”