Oil prices edged higher after Monday’s fall, as market participants weighed conflicting signals over the prospects for a diplomatic resolution in the Middle East.
US President Donald Trump said talks with Tehran were underway, while Iranian officials denied that any negotiations were taking place.
The mismatch has left markets uncertain, while Trump’s repeated threats could fuel concerns over a re-escalation.
In the meantime, talks between Iran and Oman regarding the administration of the Strait of Hormuz continue. However, this has offered little relief to the physical market, with crossings through the Straits of Hormuz and Bab el-Mandeb remaining subdued. Security concerns persist as well, as incidents involving ships continue.
Looking ahead, the outcome of the current discussions between Iran and Oman could drive prices. Progress toward a framework restoring normal shipping activity could place selling pressure on prices. Otherwise, crude prices could climb, in particular if military operations return in full force.
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