Oil prices climbed for a third consecutive session on Tuesday as hopes for an end to the Middle East conflict weakened. Renewed tensions between the United States and Iran increased concerns about global energy supplies and shipping through the Strait of Hormuz.
Iran has indicated that it could adopt a more aggressive military position as efforts to reach a lasting peace agreement remain stalled. At the same time, Washington has ruled out extending its temporary ceasefire agreement.
Brent Crude Climbs Above $91
Brent crude futures rose 89 cents, or around 1%, to $91.76 per barrel by 06:41 GMT.
That extended Monday’s gains and pushed Brent to its highest level since July 30.
U.S. West Texas Intermediate crude also moved higher. WTI futures gained $1.05 to $85.55 per barrel, reaching their strongest level since July 31.
The latest rally reflects growing concerns that the conflict could continue for longer than previously expected.
U.S.-Iran Peace Talks Lose Momentum
Progress toward a broader peace agreement between the United States and Iran appears to have stalled.
A senior Iranian official said the country would move toward a more offensive military stance as negotiations over a permanent end to the conflict showed limited progress.
Washington, meanwhile, has ruled out extending the temporary ceasefire arrangement.
The conflict began after the United States and Israel launched attacks on Iran on February 28.
Strait of Hormuz Remains a Major Supply Risk
The Strait of Hormuz remains one of the biggest concerns for global oil markets.
Efforts to restore normal tanker traffic through the strategic waterway have made little progress, increasing fears that disruptions could continue.
Tim Waterer, chief market analyst at KCM, said worsening U.S.-Iran relations have helped push oil prices higher at the start of the week.
Shipping activity through the strait remains extremely limited, keeping supply risks elevated.
Vessel Attack Adds to Market Concerns
Security risks increased again on Tuesday after a projectile struck a vessel leaving the Strait of Hormuz.
The latest incident followed a series of attacks that have reduced the number of ships crossing the waterway to single-digit levels.
Although traffic has improved slightly from the weekend, shipping volumes remain well below normal levels.
Continued attacks could raise transportation and insurance costs while restricting the movement of crude oil and other energy products.
Red Sea Tensions Add Another Risk
Geopolitical uncertainty also extended into the Red Sea.
Yemen’s Houthis said they had launched missiles at vessels they described as a Saudi military ship and four escort vessels.
The latest development adds another layer of risk for energy markets, given the importance of Middle Eastern shipping routes for global commodity flows.
Oil Prices Could Remain Between $80 and $100
Suvro Sarkar, head of energy research at DBS Bank, said the absence of a diplomatic agreement could influence oil price expectations into the fourth quarter and even into 2027.
While uncertainty remains elevated, he expects oil prices to trade broadly between $80 and $100 per barrel in the near term.
A prolonged conflict or further disruption to shipping could keep prices near the upper end of that range.
Iran and Oman Continue Hormuz Negotiations
Iran has also been holding separate talks with Oman over the management and reopening of the Strait of Hormuz.
Tehran has indicated that the two sides are close to reaching an agreement.
However, uncertainty increased after U.S. President Donald Trump responded to the negotiations with a threat of military action against Oman if it interfered with Washington’s efforts involving Iran.
Oman has historically maintained close security ties with the United States while also playing an important diplomatic role in the region.
U.S. Oil Inventories Also in Focus
Traders are also monitoring U.S. crude oil inventories for additional clues about supply and demand conditions.
A preliminary Reuters survey indicated that U.S. crude stockpiles likely declined last week, alongside inventories of refined petroleum products.
Lower inventories could provide additional support for prices if geopolitical supply risks remain elevated.
Oil Market Outlook Remains Volatile
Oil prices remain highly sensitive to developments surrounding the U.S.-Iran conflict and the Strait of Hormuz.
A breakthrough in peace negotiations or a reopening of major shipping routes could reduce the geopolitical premium in crude prices.
However, continued military escalation and limited tanker traffic could keep supply concerns elevated and support Brent and WTI prices in the coming sessions.
