US-Iran peace prospects dim as Trump rejects truce extension

Oil prices rose slightly to their highest in over three weeks on Tuesday following Iran's announcement of a more assertive stance and the closure of the Strait of Hormuz, despite the United States refusing to extend a ceasefire. Futures for Brent crude settled 15 cents higher at $91.02 a barrel, while U.S. West Texas Intermediate crude futures rose 44 cents to $84.94 a barrel.

The market's response was muted due to recent volatility with minimal price movements since June, according to Darrell Fletcher, a managing director at Bannockburn Capital Markets. Iran's decision to adopt a more aggressive military posture and the continued disruption of shipments through the Strait of Hormuz are contributing to the upward pressure on oil prices.

Saudi Aramco has resumed loading oil from inside the strait, and Chinese shipping companies have begun collecting cargoes offshore the Gulf. However, vessel traffic through the strategic waterway remains low. Iran has stated it will keep the strait closed until the U.S. meets the terms of the interim deal signed in June, while President Trump stated that there are no scheduled talks between the two countries.

Iran's shift to a more offensive military stance and ongoing attacks in the region, including an assault on a vessel in the Red Sea, continue to impact supply concerns and oil prices.