Oil prices were mixed on Tuesday as US President Donald Trump signaled progress in negotiations to end joint US-Israeli strikes on Iran, while warning that the country's critical energy infrastructure would be at risk if talks fail.
International benchmark Brent crude futures traded at $107.30 per barrel at 10.31 a.m. local time (0731 GMT), down around 0.08% from the previous close of $107.39, while US benchmark West Texas Intermediate (WTI) rose about 0.2% to $103.10 per barrel, compared with $102.88 in the previous session.
Trump told aides he is prepared to wind down the US military campaign against Iran even if the strategically vital Strait of Hormuz remains largely closed.
According to a Wall Street Journal report citing the administration officials, the US leadership believes that trying to reopen the strait immediately would extend the conflict beyond Trump's preferred timeline of four to six weeks.
Instead, the administration plans to achieve core objectives, mainly crippling Iran's navy and missile capabilities, while pressing Tehran diplomatically to resume free trade through the waterway.
If diplomacy fails, Washington would rely on European and Gulf allies to take the lead in reopening the strait, according to the report.
Trump said Monday that negotiations with Iran to end joint US-Israeli strikes were progressing, but warned that the country's crucial energy infrastructure would be destroyed if talks fail to produce results quickly.
"If for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately 'Open for Business,' we will conclude our lovely 'stay' in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!)," Trump posted on his social media platform Truth Social.
Despite the warning, he said "serious discussions" were ongoing with a "new and more reasonable" Iranian regime.
Separately, a Kuwaiti crude tanker came under attack early Tuesday near Dubai, adding to supply concerns.
Kuwait Petroleum Corporation said the vessel, Al Salmi, was hit by a drone while anchored off the UAE coast, causing damage and a fire onboard. Dubai authorities later said the situation had been contained, no injuries were reported among the 24 crew members, and no oil spill occurred.
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr
