Oil prices jumped about 5 per cent on Monday, as hopes of an imminent reopening of the Strait of Hormuz dimmed after Iran and the United States traded demands for compensation and Tehran said Washington must meet several conditions before the strategic waterway can fully reopen.Brent crude settled 4.99 per cent higher at $87.72 a barrel, while US West Texas Intermediate (WTI) rose 5.05 per cent to $82.13, news agency Reuters reported. The gains were the biggest for both benchmarks since July 29. Both had fallen more than 7 per cent last week on expectations that Iran and Oman were nearing an agreement to restore shipping through the strait.The latest developments have complicated those expectations. Iran says it is close to finalising an agreement with Oman on new shipping lanes through the Strait of Hormuz, but has made clear that the waterway will not be fully reopened unless the US meets a series of demands. Reuters reported that Tehran is seeking an end to US sanctions and military threats, as well as compensation.Why are Hormuz reopening hopes fading?Iranian officials have said the country will not reopen the strategic waterway based on a shipping agreement alone.Iran wants the US to lift sanctions, end military threats and provide compensation for damage caused during the conflict. Tehran has also said it is not currently engaged in direct talks with Washington.US President Donald Trump, meanwhile, has rejected Iran’s demand for compensation and said he would instead seek payment from Tehran for people killed or seriously wounded by Iranian actions.pic.twitter.com/iELIb2fFnP— Rapid Response 47 (@RapidResponse47) August 10, 2026“I am likewise demanding compensation from Iran, for all of the people that they have killed and gravely wounded with their roadside bombs and many conflicts, for which they are famous,” Trump wrote on his Truth Social service.Trump’s demand had not previously been raised by the US in talks or statements. The president said it would be part of all future negotiations with the Iranian leadership, and would include calls for payments to the families of hundreds of thousands of protesters whom he said Iran had killed.Story continues below this adRights groups say the Iranian government has continued to crack down on opponents during the war.Trump also said Iran should compensate “families of those killed on the USS Cole”, a reference to the October 12, 2000, attack on that naval vessel in Yemen which killed 17 US sailors, and has been blamed on al Qaeda, not Iran.“Also, with respect to the Iran negotiations, Iran should be responsible for the damages and death caused to the people of Lebanon, Syria, Yemen, and Gaza!” Trump wrote in a second post.Trump’s comments came after Iran demanded reparations from the US and Israel for damage caused by their military operations. The two sides therefore remain far apart on one of the key issues surrounding any broader agreement.Story continues below this adWhat is Strait of Hormuz and why does it matter?The Strait of Hormuz is one of the world’s most important energy chokepoints. Before the conflict, roughly one-fifth of global oil and liquefied natural gas shipments passed through the waterway, according to Reuters.That makes any prolonged disruption a major concern for oil-importing countries, including India.The prospect of a reopening had helped push oil prices lower last week. Monday’s reversal shows how quickly crude markets can respond when hopes of restoring normal shipping are delayed.More threats to global oil suppliesThe uncertainty around Hormuz comes as other developments threaten energy supplies.Story continues below this adThe Iran-aligned Houthis said they had attacked Saudi Aramco’s Jazan refinery in Saudi Arabia. Reuters reported that Aramco has postponed the restart of the refinery, which has a capacity of about 400,000 barrels per day, to August 30 after two recent Houthi attacks.The United Arab Emirates’ state-owned oil company ADNOC has also said that 15 of its vessels have been attacked while transiting the Strait of Hormuz since the conflict began, according to Reuters.Meanwhile, Ukrainian strikes have targeted Russian energy infrastructure, including the Taneco oil refinery in Tatarstan and the ZapSibNeftekhim petrochemical plant in Tyumen region.US oil reserves also fallThe United States is facing pressure on its own oil inventories. Crude stocks in the US Strategic Petroleum Reserve fell by about 6.1 million barrels last week to 298.7 million barrels, their lowest level since January 1983, according to US Department of Energy data cited by Reuters.Story continues below this adThe combination of uncertainty around Hormuz, attacks on energy infrastructure and falling US strategic reserves has added to concerns about tighter supplies.For now, the key question for oil markets is whether Iran and Oman can finalise a workable arrangement for shipping through Hormuz, and whether the US is willing to meet Tehran’s conditions for a broader reopening.Until there is a clear agreement and shipping resumes at scale, the prospect of continued supply disruption is likely to remain a major driver of crude prices.(With inputs from agencies)