Global oil prices rebounded on Tuesday as uncertainty over efforts to end the conflict between the United States and Iran continued to fuel concerns about crude supply, despite reports of possible diplomatic engagement.
Brent crude futures gained $1.04, or 1.24 per cent, to trade at $84.81 per barrel after plunging more than seven per cent on Monday to a three-week low.
US West Texas Intermediate (WTI) crude also recovered, rising 30 cents, or 0.37 per cent, to $80.64 per barrel following a decline of more than five per cent in the previous session.
The recovery comes after conflicting statements from Washington and Tehran over the status of peace talks.
US President Donald Trump said negotiations with Iran were underway and that he had suspended plans for fresh military strikes while diplomacy continued.
However, Iran’s Foreign Ministry dismissed the claim, insisting that no negotiations with the United States were taking place and that no meetings had been scheduled.
Analysts said the contradictory signals have kept investors cautious, with concerns that renewed hostilities could further disrupt global oil supplies.
“The modest rebound in prices shows that the market is still unwilling to rule out the risk of another escalation,” said Ahmad Assiri, Research Strategist at Pepperstone.
The Strait of Hormuz remains at the centre of the dispute. Before the conflict began in February, the strategic waterway handled about one-fifth of the world’s daily oil and liquefied natural gas shipments.
Although shipping activity through the Strait of Hormuz and the Bab el-Mandeb remained largely unchanged at the start of the week, security concerns continue to weigh on the market.
On Tuesday, the United Kingdom Maritime Trade Operations (UKMTO) reported that a cargo vessel northeast of Oman’s Al Khasab signalled it had been struck by an unidentified projectile.
In a separate development, shipping data showed that six Saudi-flagged supertankers recently diverted their routes around southern Africa instead of passing through the Red Sea, while two other Saudi oil tankers successfully crossed the Bab el-Mandeb Strait.
Investment bank Goldman Sachs said Brent crude is likely to trade between $80 and $90 per barrel until there is either a confirmed US-Iran agreement or a significant escalation in the conflict.
The bank also noted that global oil inventories have fallen sharply over the past two weeks, citing reduced exports from the Persian Gulf and the Red Sea, lower Russian crude shipments, and stronger demand from Asia, particularly China.
The latest developments underscore how geopolitical tensions in the Middle East continue to drive volatility in global energy markets, with traders closely watching both diplomatic efforts and security risks along key oil shipping routes.
