Brent Tops $90 and Raises the Cost of Fuels Mexico Imports

Brent crude broke above $90 per barrel on August 18 for the first time since July 30, after the two-month deadline between the United States and Iran to reopen the Strait of Hormuz expired without an agreement. The commodity was trading at $91.63 on Tuesday morning, according to The Guardian.

The deadline elapsed on Monday, August 17, with neither side announcing an extension. Bloomberg reports that the market is pricing in a longer disruption to the waterway through which close to one quarter of the world's seaborne crude transits. For Mexico, the rally carries a double effect: it raises the value of the Mezcla, the export crude priced against Brent and WTI and processed by Gulf Coast refineries in the U.S., and it pushes up the cost of imported gasoline and diesel, as well as international natural gas prices, the reference for liquefied gas contracts that compete with the pipeline gas Mexico receives from Texas.

On Monday, only six cargo vessels crossed the strait, up from five over the weekend, according to tracking firm Kpler data cited by The Guardian. A cargo ship was attacked on Tuesday while transiting the waterway, the UK Maritime Trade Operations agency reported, and Iranian officials warned they would harden their military posture if talks fail. Deutsche Bank analysts wrote that the rally reflects investors pricing in a more extended closure of the strait. In a Fox News interview, U.S. President Donald Trump ruled out imposing a new deadline on Iran and said he is in no rush to reach a deal.

The figure to watch is daily vessel traffic through Hormuz, which stood at six on Monday, and whether Brent holds above $90. Each week of disruption raises the cost of imported gasoline and supports the value of the Mexican Mezcla, a double effect on the country's energy balance.

This article was drafted with artificial intelligence assistance from verified sources and reviewed by a human editor before publication.