Oil scaled back gains after hitting its highest price in a month on Monday as Iran said diplomatic exchanges with the United States were ongoing via mediators despite renewed conflict in the Middle East.

Crude has surged over the past week as Washington and Tehran traded fire, raising fears of a sustained disruption in the Strait of Hormuz.

Before the Iran war, about 20 percent of global oil supplies flowed through the strait.

Both Brent crude and US benchmark West Texas Intermediate extended their gains after climbing more than 4% at the end of last week. Brent was trading at $89 a barrel after rising above $91, its highest price since June 11.

The latest moves came after Iran indicated that diplomacy with Washington was continuing through mediators, even as it struck Gulf targets and was targeted by US strikes.

“We have received messages — without going into details — but the main point is that the diplomatic apparatus has been active in recent days and ideas have been conveyed to us by certain mediators,” Iranian foreign ministry spokesman Esmaeil Baghaei told a news conference in Tehran.

Meanwhile, US gasoline pump prices crossed the $4 a gallon mark. National average retail gasoline prices have climbed more than 30% since the US and Israel attacked Iran at the end of February. The average pump price on Monday was $4.0030 a gallon, according to data from the American Automobile Association.

The $4 per gallon mark, a price point of financial pain for many households, was last reached in late March, after Iran halted traffic through the Strait of Hormuz. Prices retreated below that threshold........

© The Times of Israel