Oil prices rose for a third consecutive session on Tuesday, reaching their highest levels in nearly three weeks as hopes for a peace deal between the United States and Iran weakened.
Brent crude futures rose 20 cents, or 0.22 per cent, to $91.07 a barrel, while US West Texas Intermediate crude gained 49 cents, or 0.58 per cent, to $84.99 a barrel.
Both benchmarks had earlier reached their highest levels since July 30 and July 31, respectively.
The rise came as concerns grew that the conflict in the Middle East could continue for longer, potentially disrupting global energy supplies.
Analysts at ING said market sentiment was supported by US President Donald Trump’s decision not to extend the US-Iran peace agreement, as well as continuing security concerns around the Strait of Hormuz.
Progress towards peace talks and the resumption of oil tanker traffic through the strategic waterway have stalled.
Iran’s top negotiator, Mohammad Baqer Qalibaf, said on Tuesday that Tehran would keep the Strait of Hormuz closed until the United States meets conditions contained in an interim agreement reached in June.
The conditions include lifting the US blockade of Iranian ports and oil sanctions, releasing Iran’s frozen assets and ending US threats and military operations.
A senior Iranian official also told Reuters on Monday that Iran would adopt a “fully offensive” military posture if diplomatic efforts towards a permanent end to the conflict failed.
Analysts warned that the lack of progress towards a deal could continue to support oil prices into the final quarter of the year and into 2027.
Although some oil is still moving through the Strait of Hormuz, tanker crossings remain in single digits. Saudi Aramco has also resumed some oil loadings from inside the strait and is offering cargoes through ship-to-ship transfers off Fujairah in the United Arab Emirates.
SEB analyst Bjarne Schieldrop said Iran could potentially halt the flow of oil through the strait completely if it chose to do so.
Meanwhile, Iran has been negotiating with Oman on an arrangement for managing the Strait of Hormuz and says the two countries are close to an agreement.
The development comes amid heightened regional tensions after Yemen’s Houthi movement said it had launched missiles at vessels it described as a Saudi military ship and four escort vessels in the Red Sea.
The uncertainty surrounding the Strait of Hormuz, a major global oil shipping route, continues to fuel concerns about supply disruptions and further increases in energy prices.
