Oil Prices Continue to Rise Amid Stalled Peace Talks Between Iran and America

SadaNews - Oil prices rose for the third consecutive day due to pessimism about the prospects for a peace agreement between the United States and Iran, amid renewed fighting in the Middle East.

Brent crude rose to around $97 a barrel, while West Texas Intermediate was close to $95 after gaining over 7% in the first two sessions of the week. Israel continues its attacks on Lebanon, threatening the fragile negotiations that have been ongoing between Washington and Tehran, while the Islamic Republic has launched missiles at neighboring countries.

Talks Between Israel and Lebanon

Another round of talks between Israel and Lebanon is scheduled for Wednesday. U.S. President Donald Trump stated he remains optimistic that the United States can reach a temporary peace agreement with Tehran soon, denying reports in Iranian state media that discussions with Washington have stalled due to the fighting in Lebanon.

Uncertainty about a potential extension of the current ceasefire and the future of flows through the Strait of Hormuz has impacted oil prices, which had dropped last month due to optimism about a possible agreement. Delays in resolution raise concerns that the world will need to draw down more crude oil inventories while waiting for a full resumption of Gulf Arab exports.

Warren Patterson, Head of Commodity Strategy at ING Group in Singapore, said: "The gap between the U.S. and Iran suggests that any agreement leading to normalized flows is still somewhat distant." He added that "risks are tilted to the upside, especially as we approach the third quarter, which is a period of stronger seasonal demand."

U.S. Attack on Qeshm Island

Meanwhile, fighting has escalated in the Middle East. Iran launched ballistic missiles at Kuwait and Bahrain, which either crashed en route or were intercepted by air defenses, while U.S. forces also carried out strikes on Qeshm Island, according to posts on the X platform from U.S. Central Command.

Trump wants Iran to formalize specific nuclear concessions as part of a preliminary agreement to end the war, according to a report from ABC News citing informed sources. Tehran had previously provided verbal assurances that it would agree to certain conditions regarding its nuclear program, according to the report.

Price fluctuations have forced traders to reduce their risk exposure, pushing open interest, the total number of outstanding futures contracts that have not been closed or settled, in global Brent crude to its lowest level since August.

Dan Stroufin, Co-Head of Global Commodities Research at Goldman Sachs Group, said on Bloomberg TV: "Clients are fatigued." He added: "It’s a tough trading environment with headlines moving prices up and down. Positioning in the oil markets is significantly limited."

Meanwhile, in the United States, an industry report showed that crude oil inventories fell by 6.8 million barrels last week. This would be the sixth consecutive decline if confirmed by official data scheduled to be released later on Wednesday.