Brent crude rose more than 1% after falling more than 7% on Monday to a three-week low
Oil prices edged higher after selling pressure as talks to end the US-Iran war remained uncertain. This rebound stemmed from concerns that Middle East supply was at risk as a diplomatic solution to the US-Iran war, which has disrupted shipments, still seemed unlikely. Trump said talks with Iran were ongoing; Iran denied the claim.
Brent crude rose $1.02, or 1.2%, to $84.79 a barrel as of 06:32 GMT, after falling 7% in the previous session to a three-week low.
WTI rose 46 cents, or 0.6%, to $80.80 a barrel, after falling more than 5% in the previous session to a near one-week low.
Prices fell after Trump said on Sunday that he would refrain from new attacks on Iran until ongoing talks to end the war and resolve claims over control of the Strait of Hormuz were concluded.
The strategic Strait of Hormuz, which connects Gulf oil producers to global markets, was the channel through which about one-fifth of global crude oil and natural gas shipments passed before the conflict.
On Monday, Iranian Foreign Ministry spokesman Ismail Baghayi rejected Trump's claim, saying that no negotiations were taking place with the U.S. and no meetings were planned.
This situation has occurred many times before, and things haven't improved. Uncertainty increased; the scale of the sell-off seems quite exaggerated.
Iran's denial of said ongoing talks and Trump's warning if a deal cannot be reached are clearly seen as a sign of preparation for a new escalation in the background.
The Strait of Hormuz dispute is a central sticking point in the talks. Washington says the memorandum of understanding reached in June requires Iran to open the strait, while Tehran maintains the text clearly protects its own authority.
Analysts said crude oil and refined product net exports through the strait averaged 4.2 million barrels per day in the week ended July 31, versus 3.2 million the previous week.
While the conflict between Saudi Arabia and the Houthis hasn't completely halted energy flows in the Red Sea, it is leading to longer transit times, higher insurance costs, and route changes.
Maritime data released Monday showed little change in shipments through the Bab el-Mandeb Strait. Six Saudi-flagged supertankers in the Red Sea changed their routes in the Gulf of Aden, heading towards South Africa, while two tankers carrying Saudi oil passed through the Bab el-Mandeb Strait.
The Strait of Hormuz remains dangerous for ships due to the high level of uncertainty.
A two-pronged bottleneck risk persists in the market, preventing the complete elimination of the geopolitical premium on oil.
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