Oil prices edged higher on Tuesday after suffering sharp losses in the previous session. Renewed concern about possible disruptions to Middle Eastern supplies supported the rebound, while prospects for a diplomatic settlement between the United States and Iran appeared increasingly uncertain.
Brent crude rose 62 cents to $84.39 per barrel during early trading. The benchmark had fallen 7% on Monday and reached its lowest level in three weeks.
US West Texas Intermediate gained 61 cents, or 0.7%, to $80.95 per barrel after dropping 5% in the previous session.
Prices initially fell after US President Donald Trump said on Sunday that Washington would pause new attacks on Iran while talks continued. The discussions reportedly focused on ending the conflict and resolving disputes over control of the Strait of Hormuz.
Iranian Foreign Ministry spokesperson Esmail Baghaei rejected those claims on Monday. He said Tehran was not holding negotiations with Washington and had no meeting planned.
Tim Waterer, chief market analyst at KCM Trade, said the market remained highly sensitive to any military escalation. He warned that renewed missile attacks or strikes on tankers in Hormuz could quickly push prices higher.
The Strait of Hormuz remains central to the dispute. Before the conflict, around 20% of global oil passed through the route. Barclays data showed that crude and refined product exports through Hormuz rose from 3.2 million barrels per day to 4.2 million during the final week of July.
Shipping risks also remain high. UKMTO reported an incident 20 miles off Oman involving a cargo vessel struck by an unidentified object.
Meanwhile, several Saudi tankers changed routes toward southern Africa. Longer journeys, higher insurance costs and continued security threats have helped keep oil prices elevated despite recent declines across already fragile global energy markets.
