Oil prices rose in Asian trade on Tuesday as a deadlock between the U.S. and Iran showed few signs of improving.
A host of overnight reports showed U.S. President Donald Trump was unhappy with Iran’s proposal to reopen the Strait of Hormuz, leaving the key shipping lane largely closed for the near-term.
Brent oil futures rose 1% to $109.34 a barrel, while West Texas Intermediate crude futures rose 0.9% to $97.28 a barrel by 22:45 ET (02:45 GMT).
Both contracts had surged between 2% and 3% in the prior session.
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Trump unhappy with Iran proposal to reopen Hormuz- reports Reports earlier this week showed Tehran had offered a new proposal to reopen Hormuz and end the war– one that was now being considered by Washington.
But reports from the Wall Street Journal and Reuters showed Trump and his team were skeptical of the offer, given that it proposed postponing talks on Iran’s nuclear activities.
Ending Iran’s nuclear enrichment and preventing the development of a weapon are Washington’s two main goals in the ongoing conflict. The postponement of nuclear talks was a key sticking point for Trump when considering Iran’s new proposal, the WSJ report said.
The Strait of Hormuz remained largely closed, while the U.S. also maintained its naval blockade of Iran. Oil flows through Hormuz remained scant, keeping crude prices underpinned as markets fretted over tighter supplies.
Plans for more Pakistan-brokered talks between the U.S. and Iran also largely fell through over the weekend, with the status of future talks wholly uncertain. This notion drove sharp gains in oil prices on Monday.
The U.S.-Israel war on Iran is set to enter the 60-day mark soon, with little improvement in relations between Washington and Tehran.
While an indefinite ceasefire has held so far, Washington and Tehran have largely balked at attempts to hold more in-person negotiations.
Beyond the Iran war, focus this week is also on key central bank meetings in Japan and the U.S., with higher oil prices likely to spur warnings on energy-driven inflation in the coming months.
Bessent says Iran oil industry to ’collapse’ amid US blockade U.S. Treasury Secretary Scott Bessent said Iran’s oil industry was beginning to cut production due to the naval blockade, and that pumping would "soon collapse."
In a strongly worded social media post, Bessent also said that Iran was likely to begin facing gasoline shortages, as the naval blockade stalled all export activity from the country.
Iran was seen rapidly running out of oil storage capacity due to a lack of exports, stemming from the naval blockade. This scenario is expected to force Tehran into winding down its active oil production.
