Oil Prices Near Three-Week High as US-Iran Peace Hopes Fade and Hormuz Tensions Grow

By Staff, Agencies

Oil prices rose for a third consecutive session on Tuesday, approaching three-week highs as hopes for a renewed US-Iran agreement weakened and concerns grew over prolonged disruptions to energy supplies through the Strait of Hormuz.

Brent crude futures were up 7 cents, or 0.08%, at $90.94 a barrel by 1031 GMT, while US West Texas Intermediate [WTI] crude gained 53 cents, or 0.63%, to $85.03 a barrel. Both benchmarks had earlier reached their highest levels since late July.

Market sentiment was supported by US President Donald Trump’s decision not to extend the US-Iran agreement, alongside continued uncertainty surrounding shipping through the strategic waterway.

ING analysts said the lack of progress in peace negotiations and the stalled resumption of tanker traffic through the Strait of Hormuz were keeping oil markets under pressure.

The United States and "Israel" launched their military aggression against Iran on February 28, while diplomatic efforts to secure a lasting end to the conflict have since encountered renewed obstacles.

Iranian Parliament Speaker and senior negotiator Mohammad Baqer Qalibaf said Tuesday that Iran would keep the Strait of Hormuz closed until Washington fulfills the conditions of the interim agreement reached in June. Trump had previously declared the agreement “over.”

The remarks followed comments from a senior Iranian official that Tehran could shift to a “fully offensive” military posture if diplomatic efforts toward a permanent end to the conflict fail.

Analysts warned that the absence of a comprehensive agreement could have longer-term consequences for oil prices.

“The lack of any kind of deal will have an impact on oil price expectations further out in 4Q and even in 2027,” said Suvro Sarkar, head of energy research at DBS Bank.

Some oil shipments are still moving through the Strait, although crossings remain in the single digits. Saudi Aramco has resumed some oil loadings from inside the waterway and is offering cargoes through ship-to-ship transfers off Fujairah in the UAE.

SEB analyst Bjarne Schieldrop said Iran retains the ability to halt oil flows through the Strait completely if it decides to do so.

Meanwhile, Iran has continued negotiations with Oman over arrangements for managing maritime traffic through the Strait of Hormuz and says the two sides are close to reaching an understanding.

Trump has responded to the Omani-Iranian talks with threats against Oman, further complicating diplomatic efforts surrounding the crucial waterway.

Elsewhere in the region, Yemen’s Ansarullah movement said it launched a missile strike in the Red Sea against vessels it identified as a Saudi military ship and four accompanying vessels, according to its military spokesperson Yahya Saree.

The continuing uncertainty around Hormuz, combined with stalled diplomacy and the possibility of a wider regional escalation, is keeping global energy markets on alert.