US-Iran Tensions Spark Oil Price Rise Amid Fading Peace Deal Hopes

Oil prices rose for a third consecutive session on Tuesday as hopes of a US-Iran peace deal faded. Brent crude futures increased by 0.4% to $91.23 per barrel, while US West Texas Intermediate (WTI) crude futures rose by 0.66% to $85.06 per barrel.

The escalation of tensions between the two nations has been driven by Iran's decision to maintain its current stance on the Strait of Hormuz until the US meets certain conditions outlined in an interim deal signed in June. This, combined with Washington's refusal to extend a ceasefire agreement, has led to concerns about further conflict and a subsequent impact on oil prices.

Analysts at Jefferies stated that 'we are not at the pain points yet where either Iran or Trump would seek to make a deal', suggesting that negotiations may continue in the near term. However, DBS Bank's head of energy research Suvro Sarkar warned that the lack of a deal will have an impact on oil price expectations.