Oil prices recovered on Tuesday after suffering their sharpest decline in several weeks, as conflicting comments from the United States and Iran revived uncertainty over the diplomatic outlook and kept concerns over global crude supplies firmly in focus.
At 00:34 ET (04:34 GMT), October Brent crude futures climbed 1.4% to $84.94 a barrel, while September West Texas Intermediate (WTI) futures gained 1% to $81.14 a barrel.
Both benchmarks had tumbled around 5% on Monday after hopes emerged that Washington and Tehran could be preparing to restart negotiations.
Conflicting Statements Weigh on Market Confidence
U.S. President Donald Trump said on Monday that discussions with Iran were underway, describing them as Tehran’s “last chance” to secure an agreement.
“We’re talking about the strait, the opening of the strait, having it open literally by tomorrow,” Trump told reporters in the Oval Office on Monday.
Iran disputed that account. State media quoted Foreign Ministry spokesperson Esmaeil Baqaei as saying there were currently no negotiations taking place with the United States. Instead, he said Tehran was working with Oman to establish a shipping route through the Strait of Hormuz.
The contradictory messages discouraged traders from making large directional bets following Monday’s heavy selloff.
Strait of Hormuz Remains Central to Oil Market Outlook
The previous session’s decline came after Trump announced he had abandoned plans for U.S. military strikes against Iran in favour of renewed diplomatic engagement.
“The scale of the sell-off seems fairly overdone, given that there’s still considerable uncertainty. We’ve been in this situation multiple times before, only to see things unravel,” ING analysts said in a note.
“And with Iran denying that any talks are underway and Trump issuing warnings if no deal materialises, the backdrop clearly leaves ample room for a renewed escalation,” they added.
The Strait of Hormuz remains critical to global energy markets, with roughly 20% of worldwide oil consumption typically transported through the narrow shipping lane.
U.S. Oil Exports Fall to Lowest Level Since November
Fresh data released on Monday showed U.S. crude exports fell to 3.66 million barrels per day in July, marking their weakest monthly level in eight months.
The decline reflected reduced demand for U.S. crude after additional supplies from the Middle East became available following June’s temporary ceasefire, giving buyers greater flexibility in sourcing oil.
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