Oil Prices Rise as US-Iran Negotiations Continue Amid Strait of Hormuz Tensions

Oil prices rose on Tuesday as the US and Iran continued to negotiate a peace deal, while global equities edged up despite uncertainty over the inflation outlook. The Strait of Hormuz remains a key concern for traders, with tensions between the two countries escalating in recent days.

According to Pakistan's defense minister, the US and Iran are close to 'some sort of an arrangement'. However, US President Donald Trump responded to Iranian conditions by calling for compensation for those killed in wars, attacks, and protests, potentially complicating efforts to reopen the waterway.

Oil prices have surged 5% over the past two days, with Brent crude futures up 0.23% at $87.92 and WTI crude up 0.16% at $82.26. Market analyst Tony Sycamore said 'this is going to be almost a war of attrition now', with oil prices potentially sitting in the range of $75 to $95 while negotiations continue.

On Wall Street, the Dow Jones edged up 0.03% to 53,990.87 and the S&P 500 gained 0.09% to 7,760.26, while the Nasdaq eased 0.03% to 26,597.85.

The inflation outlook remains a key concern for traders, with Wednesday's US consumer price report potentially influencing expectations for September's Federal Reserve meeting.