Oil prices rose on Tuesday as negotiations between the United States and Iran over a potential peace agreement and the reopening of the Strait of Hormuz reached an impasse, keeping concerns over global energy supplies elevated.

Brent crude futures climbed to $88.00 per barrel, while US crude futures rose to $82.45 per barrel, with both benchmarks reaching their highest levels since July 31. The gains followed a rally of around 5% on Monday.

The latest increase came as diplomatic efforts to resolve the conflict faced fresh complications. US President Donald Trump responded to Iran's conditions for a peace agreement with demands of his own, including compensation from Iran for people killed in wars, attacks and protests.

The escalation in rhetoric has raised concerns that negotiations could become more difficult, potentially delaying progress toward reopening the Strait of Hormuz, a critical route for global energy supplies.

Market participants expect crude prices to remain sensitive to developments surrounding the negotiations. One market analyst suggested oil could remain within a broad $75-$95 per barrel range while investors wait for greater clarity over the diplomatic process.

Inflation Concerns Remain in Focus

The renewed rise in energy prices has also increased attention on the upcoming US July consumer price report, with markets closely watching whether higher fuel costs could reinforce inflationary pressures.

Expectations are for headline consumer prices to increase 0.1% month-on-month, while the core measure is expected to rise 0.2%.

A stronger-than-expected inflation reading could revive expectations of tighter monetary policy from the US Federal Reserve, adding another layer of uncertainty to global financial markets.

Asian Markets Remain Cautious

Asian equity markets traded cautiously amid continued uncertainty surrounding the Gulf conflict and the global inflation outlook.

The MSCI index of Asia-Pacific shares outside Japan was last up around 0.2%, while South Korea's Kospi gained approximately 0.3%.

US equity futures were slightly positive, with Nasdaq futures gaining 0.28% and S&P 500 futures rising 0.1%.

Meanwhile, the renewed increase in oil prices provided marginal support to the US dollar. The euro traded around $1.1546, while sterling stood at approximately $1.3512.

Safe-haven demand also supported precious metals, with spot gold rising 0.5% to $4,409.81 per ounce, as investors continued to monitor geopolitical developments and the outlook for global interest rates.