US-Iran Tensions Send Oil Prices Soaring Again

Oil prices rose for a third consecutive day on Tuesday as tensions between the US and Iran escalated. The Strait of Hormuz, a crucial oil shipping route, remains closed, with Iran saying it will stay shut until the US meets its conditions from an interim deal signed in June.

Brent crude futures climbed 0.7% to $91.46 a barrel, while US West Texas Intermediate (WTI) crude futures rose 0.9% to $85.25 a barrel, their highest levels in three weeks.

Tracy Shuchart, a senior economist at NinjaTrader, said that Trump's comments on Tuesday about no talks between the two countries did not change the physical setup of oil supply and demand.

Mohit Kumar, an economist at Jefferies, predicted 'further pain' in the near term for the global oil market due to stalled peace talks. He noted that neither Iran nor the US has reached a point where they would want to make a deal.

Some oil is still being transported through the Strait of Hormuz, but crossings are limited to single digits. Saudi Aramco has resumed oil loadings from inside the strait and is offering cargoes for loading via ship-to-ship transfers off Fujairah in the UAE.