Brent crude nears $90 as Iran talks stall; TUI hit by fuel costs

Brent crude futures held near $90 a barrel on Tuesday after fresh geopolitical risks in the Middle East overshadowed tentative signs of progress in U.S.-Iran talks.

The upward pressure on oil prices intensified following reports of renewed attacks on ships in the region, raising concerns over potential disruptions to key shipping lanes, including the Strait of Hormuz. The Strait, a critical chokepoint for global oil transit, has been a focal point amid escalating tensions.

Efforts to revive the stalled nuclear deal between the U.S. and Iran faced another setback after Tehran reiterated that the Strait would remain closed until Washington meets unspecified demands. Earlier, Pakistan’s defense minister suggested that negotiations were progressing, but Iran’s stance quickly dispelled hopes for a near-term resolution. Analysts noted that the conflicting positions between the two sides suggest a prolonged impasse.

The surge in oil prices has begun to weigh on corporate earnings, with TUI Group reporting that elevated fuel costs are eroding profitability. The travel and tourism giant, which relies heavily on jet fuel, warned that higher energy prices could pressure its financial performance in the coming quarters. TUI’s shares slipped in early trading as investors assessed the impact of rising fuel expenses on its operations.

Market participants will closely monitor the release of U.S. inflation data for July, due later in the session, for further clues on the Federal Reserve’s policy trajectory. Oil’s recent rally has also stoked concerns about broader inflationary pressures, particularly in energy-dependent economies.

Analysts at Goldman Sachs and JPMorgan said the current supply risks in the Middle East could sustain Brent crude prices above $90 in the near term, absent a diplomatic breakthrough. However, they cautioned that prolonged price increases could eventually dampen global demand, particularly in sectors sensitive to energy costs.