Oil Prices Spike as US-Iran Peace Hopes Fizzle Amid Strait of Hormuz Tensions

Oil prices surged above $91 per barrel on Tuesday as hopes for a US-Iran peace deal faded, sparking concerns about energy supply. The Brent crude futures rose 39 cents to $91.26, while US West Texas Intermediate crude futures jumped 51 cents to $85.31 a barrel.

The rise in oil prices comes amid worsening relations between the US and Iran. A senior Iranian official declared that the country will adopt a more offensive military posture, citing stalled efforts to negotiate a permanent end to the war with the US.

US President Donald Trump responded by threatening to bomb Oman, which has been negotiating an agreement on managing the Strait of Hormuz with Iran. However, reports suggest that Trump has also opened back-channel discussions with the Islamic Revolutionary Guard Corps.

JPMorgan estimates that every additional month of disruption could add around $7 to $8 a barrel to Brent prices, potentially reaching $114 a barrel if disruptions last for three months.