Oil prices rose for a second straight session on Tuesday as uncertainty over US-Iran negotiations continued to overshadow signs that crude exports from the Middle East are recovering.
Brent crude futures rose 1.6% to $106.99 a barrel, while US West Texas Intermediate (WTI) crude gained 1.5% to $94 a barrel by 0626 GMT, according to Reuters.
The rise came despite a rebound in crude exports from major Middle Eastern producers. Preliminary data from Kpler showed exports reached 16.328 million barrels per day in September, their highest level since the US-Israeli war with Iran began in late February. Saudi Arabia and the United Arab Emirates accounted for much of the increase.
But the recovery in supply has not fully eased concerns in the oil market.
Much of the additional crude is being moved through workarounds, including ship-to-ship transfers, which are less efficient and more costly than normal shipping routes. That has kept the market focused on the disruption around the Strait of Hormuz, a major route for global oil shipments.
Saudi Arabia has also resumed operations on its East-West pipeline and restarted crude loadings at Yanbu, providing an alternative route for exports that would otherwise move through Hormuz. The recovery is helping restore some supply capacity, but flows remain below normal levels.
Meanwhile, diplomatic efforts between Washington and Tehran remain uncertain.
US and Iranian officials have continued separate discussions with mediators as efforts to end the conflict and reopen the Strait of Hormuz continue. Iran has been awaiting a formal US response to its latest proposal, while Iranian officials have expressed doubts about reaching an agreement before the November US midterm elections.
The uncertainty has also begun to weigh on broader financial markets. Reuters reported that rising oil prices and concerns about prolonged inflation contributed to higher government bond yields, while the dollar strengthened against major currencies.
As more Gulf crude reaches international markets, traders are still pricing in the possibility that disruptions around Hormuz could persist, keeping oil prices elevated until there is greater clarity on the US-Iran negotiations and the future of the waterway.
