Oil prices rose sharply, reaching levels not seen since mid-May, after reports emerged that Iran is halting talks with the United States through mediators. This move comes in protest against Israeli attacks in Lebanon, dimming hopes that the U.S. and Iran could soon announce an extension to their ceasefire.
Crude futures extended gains following the news, with the main international oil price jumping 6 percent on Monday. Analysts warned that prices could climb much higher in the coming weeks if the Strait of Hormuz does not reopen, as uncertainty regarding the state of peace talks raises the risk that energy flows from the Persian Gulf could be curtailed for longer.
Following these sharp gains, oil prices trended lower on Tuesday as traders weighed mixed messages over the status of talks aimed at ending the conflict and reopening the Strait of Hormuz. Oil eventually steadied after rising for two sessions, though contradictory headlines regarding the prospects of a U.S.-Iran peace deal continue to boost price swings.