Oil Prices Rise as US-Iran Deal Prospects Fade

Oil prices rose on Tuesday as prospects for an agreement between the US and Iran receded, with Tehran announcing a shift to a more offensive military posture and Washington ruling out an extension of the temporary ceasefire.

The deadlock has also stalled progress on restoring oil tanker traffic through the Strait of Hormuz, heightening concerns over energy supplies.

Brent crude futures rose 0.7% to $91.49 a barrel, while US West Texas Intermediate crude climbed to $85.25 after earlier reaching $85.37, its highest level since 31 July.

Iran is separately negotiating with Oman over an agreement on managing the Strait of Hormuz. US President Donald Trump has responded by threatening to bomb Oman. Despite the tensions, reports have also emerged of a secret US backchannel to Iran’s Islamic Revolutionary Guard Corps.

A preliminary Reuters poll meanwhile showed that US crude oil and petroleum product inventories were expected to have fallen last week.

Market concerns were further heightened after Yemen’s Houthis said they had launched missiles at what they described as a Saudi military vessel and four escorts in the Red Sea.

(Reuters, max)