Brent crude prices recovered on Tuesday, reversing a sharp decline from the previous session as an attack on a vessel near the Strait of Hormuz reignited concerns over regional stability.
The incident underscores persistent doubts that the conflict between the US and Iran is nearing a diplomatic resolution, despite earlier signals of potential de-escalation.
Tehran explicitly disputed President Donald Trump's assertion that negotiations remain active, deepening the rift between the two nations.
This diplomatic friction, combined with the physical threat to shipping in one of the world's most critical energy chokepoints, has forced traders to reassess the probability of a near-term peace deal.
The market's reaction reflects a shift from tempered optimism back to caution regarding supply continuity.
The rebound in oil prices follows a period of volatility where sentiment had briefly improved on hopes for a ceasefire.