Oil prices extended their gains on Tuesday as uncertainty over a possible US-Iran agreement to reopen the Strait of Hormuz continued to unsettle global markets.
Both major crude benchmarks rose after gaining more than two per cent on Monday, with Brent crude trading above $91 a barrel. Investors remained concerned that prolonged tensions in the Middle East could keep oil prices elevated and add to inflationary pressures.
The latest market moves followed the expiration of a 60-day truce deadline between Washington and Tehran. US President Donald Trump has said he would not extend the agreement, while Iran has dismissed it as irrelevant, accusing the United States of violating the arrangement.
Trump’s envoy and son-in-law, Jared Kushner, said the two sides were engaged in “very positive and active conversations” but acknowledged a lack of trust between Washington and Tehran.
Trump has said Iran wants a deal but is unwilling to accept the terms he considers necessary. He has also threatened further action if efforts to reach an agreement fail.
The prolonged uncertainty has raised concerns among investors that higher oil prices could sustain inflation and delay interest-rate cuts by the US Federal Reserve.
US Treasury yields have also risen sharply, with long-term yields reaching levels not seen since 2007. Analysts have linked the increase to inflation concerns, rising US borrowing and heavy corporate borrowing to finance artificial intelligence investments.
Asian stocks mostly declined, following losses on Wall Street. Japan’s Nikkei fell 2.5 per cent, while South Korea and Taiwan also recorded losses. Hong Kong and Shanghai, however, posted modest gains.
Stephen Innes, global strategist at Quintex Intel, said investors had previously treated geopolitical tensions, oil price volatility and rising long-term Treasury yields as separate risks, but warned that their convergence could create greater pressure on markets.
At about 0810 GMT, West Texas Intermediate was up 0.6 per cent at $85.01 a barrel, while Brent crude rose 0.2 per cent to $91.02. The Dow Jones Industrial Average had fallen 0.5 per cent in the previous session.
