Oil prices climbed above $91 a barrel on Tuesday as stalled negotiations between the United States and Iran heightened concerns over potential disruptions to global energy supplies.
Brent crude futures rose 27 cents, or 0.3%, to $91.14 per barrel by 0003 GMT, after reaching their highest level since July 30 during Monday’s trading session.
U.S. West Texas Intermediate (WTI) crude futures also gained 42 cents to $85.04 a barrel, after rising more than 1% earlier to $85.37, their highest level since July 31.
The latest price increases came as prospects for a permanent end to the Middle East conflict appeared to weaken.
A senior Iranian official told Reuters that Tehran would adopt a “fully offensive” military posture after efforts to negotiate an end to the conflict with Washington stalled. The United States has also ruled out extending a temporary ceasefire agreement.
Strait of Hormuz remains key supply concern
The lack of progress in peace negotiations has also affected expectations for a resumption of normal tanker traffic through the strategic Strait of Hormuz.
Tim Waterer, chief market analyst at KCM, said uncertainty surrounding U.S.-Iran relations was contributing to the rise in oil prices.
“A deal to reopen the Strait of Hormuz still does not appear to be in sight, and shipping numbers remain at a trickle,” he said.
Shipping data from Kpler showed that only five commodity vessels passed through the Strait of Hormuz on Saturday, while no vessels were recorded on Sunday. This compared with 31 vessels during the previous weekend.
The Strait of Hormuz is a major global oil transit route, making any prolonged disruption a significant concern for energy markets.
The Bab el-Mandeb Strait has also become part of the supply-risk concerns following attacks in the Red Sea.
Yemen’s Houthi group said it had attacked what it described as a Saudi military ship and four escort vessels in the Red Sea using missiles.
Waterer said the risks surrounding both the Strait of Hormuz and Bab el-Mandeb were central to the current concerns over global oil supplies.
Diplomatic efforts continue
Iran has separately been negotiating with Oman over arrangements for managing the Strait of Hormuz and has indicated that the two sides are close to an agreement.
However, US President Donald Trump has responded to the negotiations with a threat to bomb Oman, a longstanding US security partner.
There have also been reports suggesting that Trump has opened back-channel discussions with Iran’s Islamic Revolutionary Guard Corps, providing a potential opening for diplomacy.
Meanwhile, US crude oil inventories were expected to have declined during the previous week, alongside product inventories, according to a preliminary Reuters poll.
