Crude oil prices rose above $91 a barrel on Tuesday as hopes of a breakthrough in the stalled peace talks between the United States and Iran faded, raising fresh concerns about global oil supplies.
Brent crude, the international benchmark, rose about one per cent to $91.76 a barrel, while US West Texas Intermediate (WTI) crude climbed one per cent to $85.24 a barrel. The increase extended oil’s gains for a third consecutive trading session.
The latest rise followed growing uncertainty over efforts to end the conflict in the Middle East, with Washington ruling out an extension of the temporary ceasefire arrangement and Iran signalling that it could adopt a more aggressive military posture.
The 60-day diplomatic window agreed by the two sides expired on Monday without a permanent peace agreement. The failure to reach a deal has heightened fears that the conflict could continue and further disrupt oil supplies from the region.
A major concern for the oil market is the Strait of Hormuz, a key shipping route through which a significant share of the world’s oil supply normally passes.
Iran has indicated that the strategic waterway will remain closed until the United States meets conditions linked to the earlier agreement. The uncertainty has made it difficult for oil traders and shipping companies to assess how quickly normal crude shipments through the region can resume.
Meanwhile, The United States has said there are currently no talks scheduled with Tehran, further weakening expectations of an immediate diplomatic breakthrough.
Market analysts said the longer the dispute continues, the greater the risk of a sustained supply disruption and higher crude prices.
The situation is also being compounded by security concerns around other important shipping routes in the region. Houthi attacks on vessels in the Red Sea have added to concerns about the movement of energy products and other commodities through the Middle East.
Oil prices had earlier eased as markets expected a diplomatic solution to the conflict. However, the collapse of those expectations has returned a geopolitical risk premium to crude prices.