US-Iran Tensions Spark Oil Price Surge
Oil prices rose for a third consecutive session on Tuesday as hopes for a US-Iran peace deal dwindled. Iran announced it would adopt a more aggressive stance, while the US rejected extending a ceasefire agreement.
Tehran's decision to close the Strait of Hormuz until its conditions are met has halted progress in talks and tanker traffic through the strategic waterway. This development threatens to prolong the conflict that began with attacks on Iran by the US and Israel on February 28.
Oil futures traded at their highest levels since July 30 and July 31, with Brent crude up 36 cents or 0.4 percent at $91.23 a barrel, while US West Texas Intermediate crude futures rose 56 cents or 0.66 percent to $85.06 a barrel.
Despite the muted market reaction to President Trump's statement that talks between Washington and Tehran were not taking place or scheduled, oil prices are expected to continue rising due to the uncertainty surrounding the conflict. According to Mohit Kumar, an economist at brokerage Jefferies, 'We are not at the pain points yet where either Iran or Trump would seek to make a deal.'