Oil Prices Soar as Middle East Disruptions Trump Hormuz Talks

Oil prices reached a fresh one-week high on Tuesday as supply disruptions in the Middle East and Russia took center stage. Brent futures rose 95 cents, or 1.1%, to $88.67 a barrel at 1:15 p.m. EDT (1715 GMT), while U.S. West Texas Intermediate (WTI) crude increased by $1.04, or 1.3%, to $83.17.

The market's focus shifted from hopes for a peace deal between the U.S. and Iran, which had led to a 5% jump in both benchmarks on Monday. Instead, analysts pointed to reports of attacks on shipping in regional waters as a key factor driving prices higher.

Mediators Qatar and Pakistan offered some hope that Tehran and Washington can end their stalemate over the Strait of Hormuz. However, Iran's Supreme National Security Council secretary, Mohsen Rezaei, stated that the strait will remain closed until the U.S. changes its behavior and accepts Iran's conditions.

Supply disruptions in Libya also contributed to the price increase. The Abu Dhabi National Oil Company issued a tender for spot crude, while state oil firm NOC warned of possible force majeure if drone attacks on energy assets continued.