Oil prices rose in Asian trade after a sharp decline in the previous session, as markets weighed the prospects for a diplomatic settlement of the conflict between the United States and Iran, Reuters reported, quoted by BTA.
Brent futures rose by $1.12, or 1.3 percent, to $84.89 a barrel, after falling 7 percent to their lowest level in three weeks yesterday.
U.S. light crude rose 77 cents, or 1 percent, to $81.11 per barrel, after falling more than 5 percent yesterday to their lowest level in nearly a week.
On Sunday, US President Donald Trump said he was refraining from new strikes against Iran because of ongoing talks to end the war and resolve the dispute over the Strait of Hormuz.
Yesterday, however, Iranian Foreign Ministry spokesman Esmail Baghaei rejected Trump's claims, saying that there were no talks between Tehran and Washington and no meetings were scheduled.
ING analysts note that the market sell-off seems excessive given the ongoing uncertainty. According to them, Iran's refusal to confirm the existence of negotiations, as well as Trump's warnings in the absence of an agreement, leave room for a new escalation.
The Strait of Hormuz remains the main contentious issue between the two countries. Washington says the memorandum of understanding, agreed in June, obliges Iran to open the waterway, while Tehran insists the document preserves Iranian control over the strait.
According to analysts at "Barclays", net exports of crude oil and petroleum products through the Strait of Hormuz averaged 4.2 million barrels per day in the week to July 31, up from 3.2 million barrels a week earlier.
Meanwhile, in the Red Sea, six Saudi supertankers rerouted to South Africa, while two tankers carrying Saudi oil passed through the Bab el-Mandeb Strait. The data showed that traffic through the Bab el-Mandeb and the Strait of Hormuz remained largely unchanged at the start of the week.
The UK Maritime Trade Office (UKMTO) reported an incident on Monday about 20 nautical miles northeast of the Omani city of Al Khasab after a cargo ship reported being hit by an unidentified projectile.
While the fighting between Saudi Arabia and the Houthis has not completely disrupted energy supplies, it has led to longer routes, higher insurance costs and some ships being diverted, said Tim Waterer, chief market analyst at "KCM Trade". He said the risk to both the Strait of Hormuz and the Bab el-Mandeb continues to support a geopolitical premium in oil prices, Reuters added.