Oil Prices Surge as US-Iran Peace Hopes Fizzle Amid Escalating Conflict

Oil prices rose for a third straight session on Tuesday as hopes for a U.S.-Iran peace deal faded. Brent crude futures were up 36 US cents, or 0.4%, at $91.23 a barrel, while U.S. West Texas Intermediate crude futures gained 56 US cents, or 0.66%, to reach $85.06 a barrel.

The increase in oil prices comes as the conflict between the United States and Iran appears to be escalating. Tehran has said it will keep the Strait of Hormuz closed until the U.S. meets the conditions of the interim deal signed in June, which was previously labelled 'over' by Trump.

Analysts expect further pain in the near term and upward pressure on oil prices. Mohit Kumar, an economist at brokerage Jefferies, said that we are not yet at the point where either Iran or Trump would seek to make a deal, implying more volatility ahead.