Oil rises as US-Iran peace hopes fade

Progress on peace talks and the resumption of oil tanker traffic through the strategic Strait of Hormuz appear to have halted, threatening to extend the conflict that the United States and Israel launched with attacks on Iran on February 28.

Iran will keep the strait closed until the U.S. meets the conditions of the interim deal signed in June, top Iranian negotiator Mohammad Baqer Qalibaf said in comments published by state media on Tuesday.

Trump, who previously labelled that deal "over", said on Tuesday that talks between Washington and Tehran were neither taking place nor scheduled, but the Strait of Hormuz was open. His comments were met with a muted market reaction.

"We are not at the pain points yet where either Iran or Trump would seek to make a deal," Mohit Kumar, an economist at brokerage Jefferies, said. "Hence, we see further pain in the near term and upward pressure on oil prices."