Oil Market Rebounds as US-Iran War Negotiations Remain Unclear
SINGAPORE — Oil prices rebounded about 1 percent on Tuesday, recovering from a sharp drop in the previous session, as concerns over Middle East supply risks persisted amid unclear diplomatic efforts to resolve the US-Iran conflict.
Brent futures rose $1.02 to $84.79 a barrel, while US West Texas Intermediate crude gained 46 cents to $80.80. Prices had plunged on Monday after President Donald Trump said he was holding off on new attacks on Iran pending negotiations, but Iran’s Foreign Ministry later rejected Trump’s claim, stating no talks were taking place.
“With Iran denying that any talks are underway and Trump issuing warnings if no deal materialises, the backdrop clearly leaves ample room for a renewed escalation,” ING analysts said in a note.
Shipping traffic at key Gulf waterways remained under pressure. On Tuesday, the UK Maritime Trade Operations agency flagged an incident after a cargo vessel reported being hit by an unknown projectile near Oman’s Al Khasab. Six Saudi-flagged supertankers changed course in the Gulf of Aden toward southern Africa.
Analysts noted that continued disruptions in both the Strait of Hormuz and the Red Sea are keeping a geopolitical premium in oil prices. “While the fighting between Saudi Arabia and the Houthis has not completely halted energy flows, it has forced longer voyage times, higher insurance costs and occasional diversions,” said Tim Waterer, chief market analyst at KCM Trade.
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