Oil prices rebounded on Tuesday after tumbling roughly 5% a day earlier, as the U.S. and Iran offered conflicting accounts of talks over reopening the Strait of Hormuz. Brent crude climbed 2.7% to $86.05 a barrel and WTI gained 2.3% to $82.22, while separate data showed U.S. crude exports slid to an eight-month low in July.
Oil prices rose on Tuesday, reversing course after tumbling in the previous session, as conflicting signals from the U.S. and Iran over talks to reopen the Strait of Hormuz revived worries over persistent crude oil supply disruptions in the Middle East.
Prices claw back Monday's losses
As of 05:26 ET (09:26 GMT), Brent crude futures climbed 2.7% to $86.05 a barrel. U.S. West Texas Intermediate crude gained 2.3% to $82.22 a barrel over the same period. Both benchmarks had fallen about 5% in the previous session on hopes for fresh U.S.-Iran talks.
Trump and Tehran clash over talks status
U.S. President Donald Trump said Monday that discussions with Iran were underway, warning that Tehran faced its "last chance" to reach a deal. However, Iranian foreign ministry spokesperson Esmaeil Baqaei said the country was not currently in negotiations with the U.S. and was instead working with Oman on a route for vessel traffic through the strait.
The waterway carries roughly a fifth of the world's oil and liquefied natural gas, making it a key flashpoint in the prolonged conflict between Washington and Tehran. The conflicting statements left the status of the on-again, off-again conflict mired in uncertainty, dampening hopes for a diplomatic breakthrough that had been bolstered after Trump called off planned U.S. strikes on Iran over the weekend.
ING analysts said the sell-off looked overdone given the considerable uncertainty still in play, noting that similar de-escalation hopes have unraveled before and that the backdrop leaves room for renewed escalation.
Crude exports slide to an eight-month low
Separate data released Monday showed U.S. crude exports fell to 3.66 million barrels per day in July, the lowest level in eight months. Increased Middle Eastern supply following June's temporary ceasefire reduced demand for American crude.
Source: Commodities & Futures News
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