Oil prices rose on Tuesday as prospects for a deal to end the Middle East conflict appeared to weaken, with Iran warning it could adopt a more offensive military posture and the United States ruling out an extension of a temporary ceasefire.
Brent crude futures gained 27 cents, or 0.3%, to $91.14 a barrel by 0003 GMT, after reaching their highest level since July 30 on Monday.
U.S. West Texas Intermediate (WTI) crude futures also rose, gaining 42 cents to $85.04 a barrel, after earlier climbing more than 1% to $85.37, their highest since July 31.
A senior Iranian official told Reuters that Tehran would shift to a “fully offensive” military posture if diplomatic efforts to secure a permanent end to the conflict with the U.S. fail.
Progress towards peace talks and the resumption of normal oil tanker traffic through the strategically important Strait of Hormuz has stalled, raising concerns over global energy supplies.
“Oil has jumped to start the week as U.S.-Iran relations look increasingly shaky. A deal to reopen the Strait of Hormuz still does not appear to be in sight, and shipping numbers remain at a trickle,” said Tim Waterer, chief market analyst at KCM.
Following recent attacks on tankers, only five commodity vessels passed through the Strait of Hormuz on Saturday, with none recorded on Sunday, according to ship-tracking data from Kpler. This compares with 31 vessels during the previous weekend.
Concerns are also spreading to another critical shipping route. Yemen’s Houthi group said it had attacked what it described as a Saudi military vessel and four escort ships in the Red Sea using missiles.
Waterer said the simultaneous risks around the Strait of Hormuz and Bab el-Mandeb were central to current concerns over oil supplies.
“The dual chokehold on the Strait of Hormuz and the Bab el-Mandeb remains highly significant. These are not secondary concerns. They sit at the centre of the current supply-risk narrative.”
Iran is separately negotiating with Oman over arrangements for managing the Strait of Hormuz and has said the two sides are close to an agreement. However, U.S. President Donald Trump has reportedly threatened military action against Oman over the negotiations.
There were, however, some signs of potential diplomatic movement, with media reports indicating that Trump had opened back-channel discussions with Iran’s Islamic Revolutionary Guard Corps.
Meanwhile, U.S. crude oil inventories were expected to have declined during the previous week, along with stocks of refined petroleum products, according to a preliminary Reuters poll.
Source: 3news
