Oil prices moved higher in early Asian trade on Tuesday after Iranian officials denied that they had held talks with the United States since the start of the conflict, a statement that undercut an earlier claim from U.S. leadership.
By 19:04 ET (23:04 GMT), West Texas Intermediate crude futures were trading up 1.1% at $89.10 a barrel.
Market volatility intensified on Monday when prices tumbled by more than 10% following an announcement from the U.S. president that he would delay a planned attack on Iran's electricity grid. The president characterized conversations with unidentified Iranian interlocutors as "very good and productive" and said the planned strike on Tehran's energy infrastructure would be postponed by five days.
That account was soon contradicted by Iran's Speaker of the Parliament, Mohammad Baqer Qalibaf, who posted on social media that no such talks had taken place. The conflicting messages left participants in oil and shipping markets uncertain about both the state of diplomatic channels and the near-term outlook for supply from the Middle East.
Reporting indicated that while direct talks between the United States and Iran had not occurred, third parties including Egypt, Pakistan and Gulf states were acting as conduits for messages between the two capitals. Iran's foreign ministry was also reported to be presenting measures intended to ease tensions.
Despite the signals about potential de-escalation, hostilities in the region showed little sign of abating on Monday as the conflict entered its fourth consecutive week. Earlier in the flare-up, oil prices had surged to nearly $120 a barrel after Iran effectively blocked the Strait of Hormuz, a critical maritime route that carries roughly a fifth of global oil consumption.
The sequence of divergent official statements, coupled with ongoing disruption in a major shipping lane, has kept prices sensitive to political developments and to any signals about how, or whether, diplomatic channels may be operating.