Oil prices rise as US military resumes attacks on Iran

Oil prices rose more than 2% on Tuesday after the United States military carried ‌out strikes in Iran, keeping markets on edge as a deal to end the war and open up the Strait of Hormuz remained elusive.

Brent futures were up $2.36, or 2.5%, to $98.50 a barrel as of 0630 GMT, after settling 7% lower in the previous session.

U.S. West Texas Intermediate ​crude was at $91.95 a barrel, up slightly from Monday’s last traded price but down $4.65, or 4.8%, from Friday’s ​close.

There was no settlement on Monday due to the U.S. Memorial Day holiday.

While both ⁠contracts fell during the overnight session on hopes of a peace deal, the U.S. strikes in southern Iran and Israeli ​attacks on Hezbollah have boosted Brent prices and widened the spread with WTI, said Michael McCarthy, CEO of online trading ​platform Moomoo Australia.

U.S. Secretary of State Marco Rubio said on Tuesday that negotiating a deal with Iran could “take a few days,” quashing hopes for an imminent end to the conflict a day after U.S. forces conducted what Washington called defensive strikes in southern Iran.

Tehran has effectively halted nearly ​all non-Iranian shipping into and out of the Gulf via the Strait of Hormuz since the war began, choking off ​about a fifth of global oil and liquefied natural gas flows.

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The strikes happened as Iran’s top negotiator and its foreign minister were ‌in Doha ⁠for talks with Qatar’s prime minister on a potential deal with the U.S. to end the three-month-old war, Reuters reported.

Both Washington and Tehran said they have made progress on a memorandum of understanding that would halt the war and give negotiators 60 days to reach a final deal.

“Traders are betting heavily that a breakthrough will finally free up the long-paralyzed tankers stuck in and ​around the Strait of Hormuz,” said Tim Waterer, chief market analyst at KCM Trade.

Ship-tracking data ​showed that three ⁠liquefied natural gas tankers passed through the strait in recent days, heading to Pakistan, China, and India, along with a supertanker carrying Iraqi crude to China that had been stranded for nearly three months.

United States President Donald Trump on Monday repeated his demand that ⁠Iran hand ​over its enriched uranium so it could be destroyed.

“It’s a sharp ​reminder that the deal could still collapse at the eleventh hour, much like the five previous attempts before it,” said Tony Sycamore, a market analyst ​at IG.