Investing.com– Oil prices rose in early Asian trade on Tuesday, extending recent gains as markets watched to see whether the U.S. and Iran could reach a deal to reopen the Strait of Hormuz.
rose 0.3% to $96.62 a barrel by 19:42 ET (23:42 GMT), after rallying over 2% in the prior session.
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Reports earlier this week showed Tehran had offered a new proposal to reopen Hormuz and end the war– one that was now being considered by Washington.
But a Wall Street Journal report on Monday evening showed U.S. President Donald Trump and his team were skeptical of the offer, given that it proposed postponing talks on Iran’s nuclear activities.
Ending Iran’s nuclear enrichment and preventing the development of a weapon are Washington’s two main goals in the ongoing conflict. The postponement of nuclear talks was a key sticking point for Trump when considering Iran’s new proposal, the WSJ report said.
But despite Iran’s new proposal, the Strait of Hormuz remained largely closed, while the U.S. also maintained its naval blockade of Iran. Oil flows through Hormuz remained scant, keeping crude prices underpinned as markets fretted over tighter supplies.
Plans for more Pakistan-brokered talks between the U.S. and Iran also largely fell through over the weekend, with the status of future talks wholly uncertain. This notion drove sharp gain in oil prices on Monday, with pushing back towards $110 a barrel.
Beyond the Iran war, focus this week is also on key central bank meetings in Japan and the U.S., with higher oil prices likely to spur warnings on energy-driven inflation in the coming months.