Oil prices surged on Tuesday as US President Donald Trump rejected the extension of peace talks with Iran following the expiration of the 60-day deadline of the memorandum of understanding (MoU) Washington and Tehran signed in June. The American commander-in-chief also reportedly threatened to bomb US ally Oman if it “gets in the way” of his government’s talks with Iran. The Gulf nation is currently holding separate negotiations with Tehran to reopen the Strait of Hormuz, the vital waterway that has now mostly remained closed for nearly six months.

Despite prior promises to end the war in West Asia soon and bring oil and gas price hikes down, Trump has assumed a more aggressive stance in the ongoing conflict, ruling out the possibility of a ceasefire deal in the near future. His latest rejection of the MoU extension further puts the US and Iran at odds in a war that started on February 28 with Washington and Israel launching a joint military action against Tehran. The stalled diplomacy between both sides has severely impeded shipping traffic traversing the Strait of Hormuz.

Oil prices climb as US-Iran standoff continues

After rising to their highest level since July 30 the previous day, Brent crude futures surged 0.7% to $91.49 a barrel by 0408 GMT on Tuesday, according to Reuters. Meanwhile, US West Texas Intermediate crude futures climbed to $85.25 a barrel, after gaining more than 1% to reach $85.37, the highest since July 31, during the earlier session.

Outgoing White House Press Secretary Karoline Leavitt and Vice President JD Vance have previously asserted that keeping oil and gas prices down for Americans is the administration’s top priority.

However, Trump has since contradicted them, maintaining on social media Monday morning (US time) that the “number one Goal is, and always will be” ensuring that Iran never has a nuclear weapon. Even a few days ago, the POTUS minimised Americans’ repeated complaints about rising prices, insisting that it was but a small price to pay in making sure that Iran doesn’t become a nuclear power.

According to GasBuddy, the average price of a gallon of regular (gas) is $4.02, up 7 cents from last week and up more than a dollar per gallon since the war started.

Refusing to apologise for the price spikes, Trump said at the New York police academy last Friday, “[Iran’s] the No. 1 state sponsor of terror in the world. We don’t want to have them have nuclear weapons.”

He added, “So remember that when you have to pay a little bit more, you’re at $4. It’s OK. I mean, it’s, I’m not — I’m not — I will never apologise. I did the right thing.”

Vance, on the other hand, spoke to a different tune on Fox News last week. He laid out keeping oil and gas “cheap for Americans all over our country” as “goal No. 1” for the Trump administration.

“And then obviously, goal No. 2 is ensure that Iran never gets a nuclear weapon,” he continued, adding that the administration is confident about accomplishing both goals.

Similarly, Karoline Leavitt maintained earlier that both goals are “equally as important” to Trump.

“Of course, we want to keep gas prices low. That’s why the administration has done so much to keep the markets stable, but also ensuring Iran can never get a nuclear weapon is the president’s priority with respect to the ongoing conflict, and it’s something he’s going to see through one way or another,” Trump’s press secretary, who recently announced her resignation, added.

Trump’s new remarks make war resolution even more uncertain

Speaking to reporters in the Oval Office on Monday, Trump said of Iran, “Well, they want to make a deal, but they’re not going to make the kind of a deal that I feel is necessary.”

Iran’s Foreign Ministry similarly rebuffed any plans of additional negotiations taking place between the two sides.

The ministry’s spokesperson Esmaeil Baqaei said, “We did not start any negotiations at all, and the US violated the understanding from the very beginning; therefore, the 60-day issue is not relevant,” state news agency Tasnim reported.

In light of the latest developments, a senior Iranian official also told Reuters on Monday that Tehran will switch to a “fully offensive” military stance as attempts to end the war with the US hit a wall once again.

Elsewhere, in a Fox News interview, Trump said that he expects Iran to “put up the white flag of surrender,” adding that “if Oman gets in the way, we’ll bpmb the sh** out of them.”

Given its location on the border of the Strait of Hormuz‘s southern side, Oman has emerged as one of the key players in negotiating with Iran to reopen the waterway through which a fifth of the world’s oil and liquefied natural gas (LNG) generally passes. Consequently, the Gulf nation has been caught in the crossfire and sustained multiple attacks despite being positioned between the US and Iran as a neutral country.

In another unprecedented development, the UK Maritime Trade Operations (UKMTO) received a report on Tuesday that a vessel was hit by an unknown projectile while exiting the Strait of Hormuz. It sustained engine room damage and a crew casualty. According to Reuters, the remaining crew members were assisted by the Omani Coast Guard.

Vessel crossings through the waterway remain in the single digits, down more than 130 a day before the war.