Oil rises as hopes for a ceasefire between the US and Iran fade

Oil prices rose on Tuesday as prospects for a deal to end the war in the Middle East receded, after Iran announced it would adopt a more aggressive stance and the United States ruled out extending a ceasefire agreement, fueling concerns about energy supplies.

A senior Iranian official told Reuters on Monday that his country had decided to shift its policy from defense to “full-scale attack” due to the failure of efforts to reach a permanent agreement ending the war with the United States, as Washington ruled out extending the temporary ceasefire deal.

Progress in ceasefire talks and the resumption of oil tanker traffic through the strategic Strait of Hormuz has stalled, threatening to prolong the conflict launched by the United States and Israel against Iran on February 28.

Meanwhile, U.S. West Texas Intermediate crude rose 42 cents to $85.04 a barrel, after gaining more than 1 percent earlier in the session to $85.37, its highest level since July 31.