Oil prices increased on Tuesday as hopes for a lasting Middle East peace deal began fading. Investors remained concerned about possible disruptions to global energy supplies.
Brent crude futures rose 62 cents, or 0.7%, to $91.49 per barrel by 0408 GMT. The benchmark had already reached its highest level since July 30 during Monday’s trading.
US West Texas Intermediate crude futures also gained 75 cents to $85.25 per barrel. The contract had earlier climbed more than 1% to reach $85.37.
Market uncertainty increased after Iran indicated that it could adopt a more aggressive military position. A senior Iranian official said Tehran would move toward a fully offensive stance.
The statement followed Washington’s decision not to extend its temporary ceasefire agreement. The developments have raised fresh concerns about the future of the conflict.
Progress toward peace talks and the reopening of oil tanker traffic through the Strait of Hormuz has also stalled. The situation has increased concerns about international energy supplies.
The conflict began after attacks by the United States and Israel against Iran on February 28. Since then, shipping through the strategic waterway has remained severely restricted.
Tim Waterer, chief market analyst at KCM, said US-Iran relations appeared increasingly unstable. He noted that an agreement to reopen the Strait of Hormuz was still not visible.
Shipping traffic through the waterway has remained limited. A projectile struck a vessel leaving the Strait of Hormuz on Tuesday, according to tracking data.
The latest incident added to a series of attacks that have kept daily crossings in the region to single-digit levels. Although traffic increased slightly from the weekend, overall movement remains extremely low.
Meanwhile, Yemen’s Houthis claimed responsibility for missile attacks against vessels in the Red Sea. Military spokesperson Yahya Saree said the targets included a Saudi military ship and four escort vessels.
The continuing attacks have added another layer of uncertainty for energy markets. Investors are closely monitoring developments across major shipping routes.
Analysts warned that the fading prospects of a broader agreement could influence oil prices beyond the current quarter.
DBS Bank’s head of energy research, Suvro Sarkar, said the lack of a deal could affect price expectations into the fourth quarter and 2027.
He expects crude prices to remain between $80 and $100 per barrel in the near term. However, the outlook will depend heavily on developments surrounding the conflict.
Iran has also been negotiating with Oman over arrangements for managing the Strait of Hormuz. Tehran has said discussions with Oman are approaching an agreement.
However, the talks have faced additional pressure after US President Donald Trump threatened military action against Oman. The country remains a longstanding US security partner.
The uncertainty surrounding the waterway has become a major factor for global oil markets. The Strait of Hormuz is a vital route for international energy shipments.
Meanwhile, US crude oil inventories were expected to decline last week. A preliminary Reuters poll indicated that product stockpiles may have also fallen.
With hopes for a lasting ceasefire fading, traders are expected to closely watch diplomatic developments and shipping activity. Any further escalation could place additional upward pressure on crude prices.
The oil market is therefore entering another volatile period. Investors remain focused on whether diplomatic efforts can restore stability across the region.
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