Oil prices rose on Tuesday as prospects of reaching an agreement to end the war in the Middle East diminished, after Iran announced that it would adopt a more offensive posture and the United States ruled out extending a ceasefire agreement, heightening concerns over energy supplies.
A senior Iranian official told Reuters on Monday that Tehran had decided to shift its policy from defense to “full-scale offensive” due to stalled efforts to reach a lasting agreement to end the war with the United States. Washington, meanwhile, ruled out extending the temporary ceasefire agreement.
Progress in talks to end the war and resume oil tanker traffic through the strategic Strait of Hormuz has stalled, threatening to prolong the conflict that was 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 reaching their highest level since July 30 on Monday.
U.S. West Texas Intermediate crude also rose 42 cents to $85.04 a barrel, after climbing more than 1% earlier in the session to $85.37, its highest level since July 31.
“Oil prices have risen at the start of the week amid heightened tensions in U.S.-Iran relations. Reaching an agreement to reopen the Strait of Hormuz remains a distant prospect, while the number of vessels passing through remains extremely limited,” said Tim Waterer, chief market analyst at KCM.
Vessel-tracking data from Kpler showed that five commodity-carrying vessels passed through the strait on Saturday, while no vessels were recorded on Sunday, compared with 31 vessels at the beginning of the previous week.
Tehran is separately negotiating with Oman over the management of the strait and says the two sides are close to reaching an agreement. Trump, however, responded to the talks by threatening to bomb the Gulf state, which has long been a U.S. security partner.
In a potential diplomatic breakthrough, media reports said Trump had opened back-channel communications with Iran’s Islamic Revolutionary Guard Corps.
Reuters
