-- Crude futures were range-bound on Tuesday as traders weighed prospects for high-stakes Pakistan peace talks between the US and Iran against the threat of renewed conflict.
Brent crude futures eased 0.3% to $95.16 per barrel, while Murban oil futures were up 0.2% to $93.19/bbl.
While prices have pulled back from Monday's highs, ING analysts cautioned that energy markets may be "underpricing" the ongoing disruption, stating that "optimism appears to be clouding the reality of the supply shock."
However, with President Donald Trump ruling out a ceasefire extension beyond Wednesday evening, oil prices remain trapped between hope for a deal and the threat of renewed escalation.
Trump reportedly stated it is highly unlikely he will extend the ceasefire without a signed deal, reiterating that the US naval blockade of the Strait of Hormuz will remain in force until Iran agrees to a final settlement.
According to a Reuters' report citing a senior Iranian official Tehran is reviewing its participation in a second round of peace talks in Islamabad.
As of Tuesday morning, shipping activity through the Strait of Hormuz remains severely limited.
While Iran briefly declared the corridor open on Friday, the weekend seizure of an Iranian vessel by the US led Tehran to reimpose restrictions.