Investing.com — Oil prices on Tuesday erased losses and ticked higher, as uncertainty over the state of U.S.-Iran peace talks deepened amid mixed messaging from both parties.
Iranian media for a second straight day reported that Tehran had stopped exchange of messages with Washington. On the other hand, President Donald Trump and Secretary of State Marco Rubio asserted that negotiations were ongoing, leaving traders in a state of limbo.
A potential cooling in tensions between Israel and Iran-backed Hezbollah militants in Lebanon calmed tensions somewhat, but the path to an immediate reopening of the critical Strait of Hormuz remains elusive.
At 13:19 ET (17:19 GMT), for August, the global oil benchmark, ticked up 1% to $95.96 a barrel, reversing a decline of as much as 2.2%. for July added 1.5% to $93.53 a barrel, turning around a fall of as much as 2.2%.
“The [o]il price direction continues to be dictated by Iran-related headlines amid considerable uncertainty over how negotiations between the U.S. and Iran are progressing,” analysts at ING said in a note.
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Tensions between Washington and Tehran have flared up in recent weeks amid exchanges of fire in the Gulf and an Israeli military operation in Lebanon, threatening a fragile ceasefire between the warring parties that has been in place since the beginning of April.
Israel’s moves in Lebanon have become a sticking point in negotiations between the U.S. and Iran, with Iran’s semi-official Tasnim News Agency on Monday saying it had learned that Tehran’s negotiating team was suspending mediated “dialogues and exchange of texts” with Washington.
Reuters reported that Lebanon had announced a partial ceasefire between Iran-backed Hezbollah militants and Israel, although Israel’s military said it had intercepted two projectiles fired from Lebanon on Tuesday. Trump on Monday stressed that Hezbollah had promised, through mediators, not to attack Israel. Meanwhile, Israeli Prime Minister Benjamin Netanyahu had pledged to pull back from assaulting Beirut, Trump claimed.
Meanwhile, uncertainty continued to grow over the true state and extent of peace talks. Iran’s Fars News Agency on Tuesday reported that there was currently no exchange of messages with the U.S., citing an informed source. The agency said the exchange had been stopped for at least a few days in order to reach a preliminary memorandum of understanding between Washington and Tehran, citing the source.
“Fake News Reports that the Islamic Republic of Iran, and the U.S.A., stopped speaking a few days ago are false and erroneous. The conversations between us have been going on continuously, including four days ago, three days ago, two days ago, one day ago, and today,” Trump later said on Truth Social.
“We are in talks,” Secretary of State Rubio said on Tuesday in a hearing before the Senate Foreign Relations Committee.
“There is the prospect before us – which could happen today, it could happen tomorrow, it could happen next week – that, for the first time, certainly in my memory, they have agreed to negotiate aspects of their nuclear program that just a month ago, just a year ago, they were refusing to even mention, much less enter into discussions about,” Rubio said.
Iran’s nuclear ambitions is also a key sticking point in negotiations with the U.S., with Trump repeatedly saying that the country cannot have a nuclear weapon.
Ambar Warrick and Scott Kanowsky contributed to this article