Oil prices rose on Tuesday as the prospects for a deal to end the war in the Middle East faded after Iran announced it would take a more aggressive stance and the United States ruled out extending the ceasefire agreement, boosting concerns about energy supplies.
A senior Iranian official told Reuters on Monday that his country had decided to shift its policy from defense to full offense because of the stalled efforts to reach a permanent agreement to end the war with the United States, at a time when Washington ruled out extending the temporary ceasefire agreement.
Talks aimed at ending the war and resuming oil tanker traffic through the strategic Strait of Hormuz have stalled, threatening to prolong the conflict launched by the United States and Israel against Iran on February 28.
Brent crude futures rose 27 cents, or 0.3%, to $91.14 a barrel by 00:03 GMT, after hitting their highest level since July 30 on Monday.
U.S. West Texas Intermediate crude rose 42 cents to $85.04 a barrel, after gaining more than 1% earlier in the session to $85.37, its highest level since July 31.
Tim Waterer, senior market analyst at KCM, said: “Oil prices rose at the start of the week amid escalating tensions in US-Iranian relations. A deal to reopen the Strait of Hormuz remains a long way off, and the number of ships passing through is still very limited.”
Ship tracking data from Kpler showed that five commodity vessels crossed the strait on Saturday, with no vessels recorded on Sunday, compared to 31 vessels at the start of the previous week.
Tehran is also negotiating separately with Oman over the management of the Strait of Hormuz, and says they are close to reaching an agreement. However, Trump responded to those negotiations by threatening to bomb the Gulf state, a long-standing US security partner.
In a diplomatic glimmer of hope, media reports indicated that Trump had opened back channels of communication with the Iranian Revolutionary Guard.
