Oil prices rebounded by more than 1% on Tuesday after suffering steep losses in the previous session, as contradictory comments from Washington and Tehran reignited concerns that tensions in the Middle East could continue to disrupt global crude supplies.
As of 00:34 ET (04:34 GMT), Brent crude futures for October delivery climbed 1.4% to $84.94 per barrel, while September West Texas Intermediate (WTI) crude futures advanced 1% to $81.14 per barrel.
Both benchmarks had fallen by roughly 5% on Monday after reports fuelled optimism that fresh negotiations between the United States and Iran could be imminent.
Mixed Messages Create Fresh Uncertainty
U.S. President Donald Trump stated on Monday that discussions with Iran were taking place, describing them as Tehran’s “last chance” to reach a deal.
“We’re talking about the strait, the opening of the strait, having it open literally by tomorrow,” Trump told reporters in the Oval Office on Monday.
However, Iran rejected those claims. State media quoted Foreign Ministry spokesperson Esmaeil Baqaei as saying that no negotiations with the United States were currently taking place. Instead, he said Iran was working alongside Oman on arrangements for vessel traffic through the Strait of Hormuz.
The conflicting statements left traders cautious after Monday’s sharp decline, limiting appetite for aggressive positioning.
Market Watches Strait of Hormuz Developments
Monday’s selloff came after Trump revealed that he had cancelled planned U.S. military strikes on Iran and instead announced a renewed diplomatic effort with Tehran.
“The scale of the sell-off seems fairly overdone, given that there’s still considerable uncertainty. We’ve been in this situation multiple times before, only to see things unravel,” ING analysts said in a note.
“And with Iran denying that any talks are underway and Trump issuing warnings if no deal materialises, the backdrop clearly leaves ample room for a renewed escalation,” they added.
The Strait of Hormuz remains one of the most closely watched areas for energy markets, as around one-fifth of global oil consumption normally passes through the strategic shipping route.
U.S. Crude Exports Hit Eight-Month Low
Separately, data released on Monday showed U.S. crude exports dropped to 3.66 million barrels per day in July, marking their lowest level in eight months.
The decline reflected softer demand for American crude as increased supplies from the Middle East, following June’s temporary ceasefire, provided buyers with additional alternatives.