(Bloomberg) — Oil rose for a third day on pessimism over the prospects of the US and Iran reaching a peace deal and as fresh fighting flared up in the Middle East.
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Brent climbed toward $97 a barrel, while West Texas Intermediate was near $95 after adding more than 7% in the week’s first two sessions. US forces intercepted Iranian ballistic missiles and drones aimed at neighboring Middle East countries and struck a command center in the Islamic Republic in response.
That came after President Donald Trump said he’s still optimistic the US can reach an interim peace deal with Tehran soon — disputing reports in Iranian state media that discussions with Washington had been suspended over the fighting in Lebanon. Another round of talks between Israel and Lebanon is scheduled for Wednesday.
The lack of clarity over the potential extension of the current ceasefire — and the future of flows through the Strait of Hormuz — has buffeted oil prices, which fell last month on optimism that a deal could be reached. The delay in a resolution is raising concerns that the world will need to tap crude inventories further as it waits for Persian Gulf exports to fully resume.
“The gap between the US and Iran suggests any deal that leads to a normalization in flows is still some way off,” said Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. “Risks are skewed to the upside, particularly as we approach the third quarter, a period of seasonally stronger demand.”
Iran fired ballistic missiles at Kuwait and Bahrain — which broke apart en route or were downed by air defenses, US Central Command said in a post on X. American forces also conducted strikes on the Islamic Republic’s Qeshm Island, it said in a separate post.
Meanwhile, Kuwait suspended flights to its international airport after an Iranian drone attack damaged a passenger building.
Trump wants Iran to put specific nuclear concessions in writing as part of a preliminary agreement to end the war, ABC News reported, citing people familiar with the matter. Tehran had earlier given verbal assurances that it would agree to certain terms related to their nuclear program, according to the report.
Price volatility has forced dealers to scale back their risk exposure, pushing open interest — the total number of futures contracts that haven’t been closed, liquidated or delivered — in global benchmark Brent to the lowest since August.