Oil Prices Rise For Second Day As US-Iran Conflict Fuels Middle East Supply Concerns

Oil prices extended gains for a second straight session on Tuesday as concerns over possible disruptions to Middle East energy supplies continued to dominate market sentiment.

The impact of the ongoing US-Iran conflict outweighed indications that crude exports from the region were gradually recovering.

Brent crude futures rose $1.49, or 1.4%, to $106.77 a barrel, while US West Texas Intermediate (WTI) crude increased $1.34, or 1.5%, to $93.94 a barrel. Both benchmarks had ended the previous trading session nearly $1 higher.

US-Iran talks fail to ease market concerns

Officials from the US and Iran held separate discussions with mediators as part of renewed diplomatic efforts to end the seven-month conflict. The talks are expected to focus on a revised version of a seven-day proposal presented by Iran during the United Nations General Assembly.

Despite the diplomatic engagement, uncertainty over the outcome continued to support oil prices.

Iranian officials have reportedly expressed doubts over reaching an agreement before tensions around the Strait of Hormuz increase further, keeping concerns over crude supply disruptions elevated.

The conflict, which began in late February following US and Israeli strikes on Iran, has increased attention on the Strait of Hormuz, a key maritime route for global oil and gas shipments.

US considers diesel measures amid fuel price concerns

Meanwhile, the US administration is examining measures to reduce domestic fuel prices, including allowing wider sales of red-dyed diesel, according to people familiar with the discussions.

The proposal could enable certain buyers to avoid federal fuel taxes and has emerged as an alternative to imposing restrictions on diesel exports.

The move follows discussions within the US government over possible steps to manage fuel costs. Market participants continue to monitor developments in both energy diplomacy and policy measures as geopolitical risks remain a major factor influencing crude prices.

With uncertainty surrounding the Strait of Hormuz and the broader US-Iran conflict, oil markets remain sensitive to any developments that could affect global supply flows.