Oil Prices Soar on Fading US-Iran Peace Hopes
Oil prices surged to near three-week highs on Tuesday as hopes for a US-Iran peace agreement faded. The Brent crude futures climbed 35 cents, or 0.39%, to $91.22 a barrel by 0827 GMT, while the U.S. West Texas Intermediate crude futures were up 81 cents, or 0.96%, at $85.31 a barrel.
The prices rose for a third straight day, with Brent touching its highest since July 30 and WTI since July 31. The increase was driven by US President Donald Trump's decision not to extend the US-Iran peace agreement and continued security concerns in the Strait of Hormuz.
Iran has announced that it will shift to a 'fully offensive' military posture as efforts have stalled towards a permanent end to the war. This move threatens to prolong energy supply disruptions, which are already a major concern due to the ongoing conflict in the Middle East.
Saudi Aramco has resumed oil loadings from inside the Strait of Hormuz, but Iran still has the capability to halt the flow of oil through the strait whenever it chooses. The country is also negotiating with Oman an agreement on managing the Strait of Hormuz, but Trump's threat to bomb the Gulf state has put these talks at risk.