Oil Prices Steady Near One-Week Highs Amid Fading US-Iran Peace Deal Hopes

Oil prices have steadied near one-week highs as hopes of a US-Iran peace deal dim. The development comes after President Donald Trump demanded compensation from Iran for damage incurred, which is likely to complicate efforts to reopen the Strait of Hormuz.

Brent crude futures were flat at $87.81 a barrel by 0013 GMT, while US West Texas Intermediate crude futures held at $82.20 a barrel. The benchmarks rose more than 5% on Monday to their highest since July 31.

Tim Waterer, chief market analyst at KCM Trade, said 'There appears to be a gulf, no pun intended, between the U.S. and Iran over what any agreement would actually look like.' He added that the optimism from last week is being unwound, giving oil prices a bid tone.

The Strait of Hormuz remains a concern, with intermittent restrictions or threats of further incidents keeping insurance costs elevated and forcing longer shipping routes. This has led to constrained energy flows near term.