Oil Rises Over 1% as Conflicting U.S.-Iran Signals Reignite Supply Concerns

Oil Benchmarks Recover After Sharp Decline

As of 00:34 ET (04:34 GMT) on Tuesday, Brent Oil Futures expiring in October rose 1.4% to $84.94 per barrel, while West Texas Intermediate (WTI) crude futures for September gained 1% to $81.14 per barrel. Both benchmarks had fallen about 5% on Monday amid hopes that fresh negotiations between the United States and Iran might ease tensions and support safer crude flows.

The renewed gains came after U.S. President Donald Trump said on Monday that talks with Iran were underway, describing them as Tehran's “last chance” to reach a deal. He also referred to efforts related to the Strait of Hormuz, stating, “We're talking about the strait, the opening of the strait, having it open literally by tomorrow.”

Iran, however, publicly rejected the notion that it was engaged in negotiations with the United States. State media cited foreign ministry spokesperson Esmaeil Baqaei as saying the country was not currently in talks with Washington and was instead working with Oman on a route for vessel traffic through the Strait of Hormuz.

Market Focus on Strait of Hormuz and U.S. Export Data

The divergent statements left traders cautious after Monday’s steep declines. ING analysts noted that “the scale of the sell-off seems fairly overdone, given that there's still considerable uncertainty,” emphasizing that similar situations in the past had “unravel[ed].” They added that, with Iran denying talks and Trump issuing warnings if no deal materialises, there remained “ample room for a renewed escalation.”

The Strait of Hormuz, through which roughly a fifth of global oil consumption normally passes, remains a central focus for energy markets given its importance as a transit route for crude exports from the Middle East.

Separately, data released on Monday showed that U.S. crude exports fell to 3.66 million barrels per day in July, marking the lowest level in eight months. The decline was attributed to increased Middle Eastern supply following June's temporary ceasefire, which reduced demand for American crude.

FAQ

What were the latest prices for Brent and WTI futures?
Brent Oil Futures for October rose 1.4% to $84.94 per barrel, while West Texas Intermediate (WTI) crude futures for September gained 1% to $81.14 per barrel as of 00:34 ET (04:34 GMT) on Tuesday.

Why did oil prices fall about 5% on Monday?
Prices declined around 5% on Monday on hopes that fresh negotiations between the United States and Iran could ease tensions and support more secure crude flows.

What is Iran’s position on talks with the United States?
According to state media citing foreign ministry spokesperson Esmaeil Baqaei, Iran is not currently in negotiations with the United States and is working with Oman on a route for vessel traffic through the Strait of Hormuz.

How did U.S. crude exports perform in July?
U.S. crude exports fell to 3.66 million barrels per day in July, the lowest level in eight months, amid reduced demand for American crude following increased Middle Eastern supply after June's temporary ceasefire.