As supply concerns increase due to dwindling chances for US-Iran peace, oil prices rise.

Oil prices rose on Tuesday as a deal to end the Middle East war ‌seemed further out of sight with Iran saying it will adopt a more offensive stance and the U.S. ruling out extending a ceasefire agreement, heightening worries about energy supply.

Iran will shift to a “fully offensive” military posture because efforts to negotiate ​a permanent end to the war with the U.S. have stalled, a senior Iranian official told ​Reuters on Monday, as Washington ruled out extending a temporary ceasefire agreement.

Outward progress towards ⁠peace talks and a resumption of oil tanker traffic through the strategic Strait of Hormuz has ground ​to a halt, threatening to extend the conflict that the U.S. and Israel launched with attacks on Iran on ​February 28.

Brent crude futures climbed 27 cents, or 0.3%, to $91.14 by 0003 GMT, after rising to their highest since July 30 on Monday.

U.S. West Texas Intermediate crude futures were up 42 cents to $85.04 a barrel, after gaining more than 1% earlier ​in the session to $85.37, their highest since July 31.

“Oil has jumped to start the week as U.S.-Iran ​relations look increasingly shaky. A deal to reopen the Strait of Hormuz still does not appear to be in sight, ‌and shipping ⁠numbers remain at a trickle,” said chief market analyst at KCM, Tim Waterer.

Following attacks on tankers, only five commodity vessels transited the Hormuz strait on Saturday, with none registered for Sunday, ship-tracking data from Kpler showed, versus 31 in the prior weekend.

Yemen’s Houthis attacked what they described as a Saudi military ship and four ​escort vessels in the Red ​Sea with missiles, according ⁠to the group’s military spokesperson Yahya Saree on Telegram.

“The dual chokehold on the Strait of Hormuz and the Bab el-Mandeb remains highly significant. These are not secondary ​concerns. They sit at the centre of the current supply-risk narrative,” KCM’s Waterer ​said.

Iran has ⁠separately been negotiating an agreement on managing the strait with Oman and says they are close to a deal. But Trump responded to those negotiations with a threat to bomb the Gulf state, a longstanding U.S. security partner.

Pre-war global oil demand sat at 103 million barrels per day, meaning the conflict erased a massive 25 days of global consumption.

In ⁠a glimmer ​of hope for diplomacy though, media reports said Trump had opened ​back-channel discussions with the Islamic Revolutionary Guard Corps.

U.S. crude oil stockpiles were expected to have fallen last week alongside product inventories, a ​preliminary Reuters poll showed on Monday. 

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