Oil Prices Surge as US-Iran Peace Deal Fades Amid Escalating Tensions
Oil prices rose on Tuesday as hopes for a US-Iran peace deal continued to fade. Iran announced it would adopt a more aggressive military stance, while the US ruled out extending a temporary ceasefire agreement. This has led to increased concerns about energy supply risks.
Brent crude futures climbed 27 cents, or 0.3%, to $91.14, while U.S. West Texas Intermediate crude futures were up 42 cents to $85.04 a barrel. Tim Waterer, chief market analyst at KCM, said that 'oil has jumped to start the week as US-Iran relations look increasingly shaky.'
Shipping numbers through the Strait of Hormuz remain low, with only five commodity vessels transiting on Saturday and none registered for Sunday. Iran has been negotiating an agreement with Oman to manage the strait, but talks have stalled due to a threat from Trump to bomb Oman.
The situation in the Middle East remains volatile, with Yemen's Houthis attacking a Saudi military ship and four escort vessels in the Red Sea. Waterer warned that 'the dual chokehold on the Strait of Hormuz and the Bab el-Mandeb remains highly significant.'