-- Crude prices extended gains on Tuesday with Brent futures hovering above a three-week peak as the market remained skeptical of a new Iranian peace proposal.
The Brent futures contract gained 2.3% to $110.72 per barrel, taking the contract to its highest since April 7.
Murban closed at $104.19 on April 27 and was not trading as of the time of publishing this oil price update.
While reports emerged that Tehran offered a deal to reopen the Strait of Hormuz in exchange for an end to the US naval blockade, analysts at Commerzbank noted that the market is "losing its faith" in such stories after numerous false starts.
"US-Iran peace talks remain at an impasse, with efforts to resume negotiations stalled. Iran reportedly offered the US a proposal to reopen the Strait of Hormuz over the weekend, which the White House confirmed is being discussed by President Trump's national security team," Saxo Bank analysts said.
The physical impact of the US-led blockade is becoming increasingly stark.
Data from Kpler reveals that Iranian oil exports have collapsed by 70%, dropping to just 567,000 barrels per day from a March average of 1.85 million.
With Iranian storage facilities estimated to have less than 22 days of capacity remaining, the country faces forced production cuts of up to 1.5 million barrels per day by mid-May.
This possibility of such a supply cut was reinforced on Monday when two Iran-linked supertankers, the Tifani and Phonix, were seen turning east away from the blockade after being intercepted by US forces near Sri Lanka.
Looking ahead, the prospect of a "cruel summer" for global consumers is growing, strategists at RBC Capital Markets noted.
RBC analysts warned that the conflict, now entering its third month, has triggered the largest supply shock in modern history by displacing nearly one billion barrels of crude and refined products.
Even if a diplomatic breakthrough occurs, experts caution that damage to infrastructure and logistics entail a slow future recovery in Middle Eastern oil and gas output, ensuring higher prices and tighter inventories persist.