Rezaei, secretary of Iran's Supreme National Security Council, said that no negotiations are currently under way between Tehran and Washington, rejecting US claims that talks between the two sides are continuing.

His remarks, as carried by market commentary, included:

• The Strait of Hormuz will not be opened until the US meets Iran's seven conditions.
• All US claims regarding continuation of negotiations with Iran are pure lies and fabrications.
• We asked the US to provide a clear response to our proposals.
• The US hasn't provided a clear response yet, but they might provide such a response in the future.

The comments followed remarks from US Secretary of State Marco Rubio. Taken together, according to the ForexLive commentary, they "don't sound like there is any possibility of a deal," pointing instead to a return to a "war of economic attrition," in which the US attempts to blockade Iran while Iran works to drive oil prices higher with the help of the Houthis in Yemen.

Much depends on how effectively Iran can disrupt shipping through the Strait of Hormuz, the commentary noted. Alternative routes offer only partial relief: the US Energy Information Administration has noted that bypass pipelines in Saudi Arabia and the UAE can carry just a fraction of the volumes that normally transit the strait, leaving most Gulf oil flows dependent on it. French President Emmanuel Macron also addressed the issue, speaking about improving insurance rates for shipping in the strait. It remains unclear how much oil is reaching markets via alternative routes, as well as how much in oil products and other commodities is getting out of the Gulf.

The Strait of Hormuz, which lies between Iran and Oman, is the world's most important oil transit chokepoint, carrying roughly one-fifth of global petroleum liquids consumption, according to the US Energy Information Administration. The Houthis, an Iran-aligned group based in Yemen, have repeatedly targeted commercial shipping in regional waters. Iran's Supreme National Security Council is the country's top decision-making body on national security and foreign policy.

The commentary expressed skepticism about the flat denial of negotiations, pointing to numerous reports of aircraft flying between Iran and other destinations, and noted that little weight can necessarily be placed on public comments from Rezaei, Rubio, or anyone else involved. The immediate markers to watch from here are whether Washington supplies the "clear response" Rezaei said Iran is awaiting, and whether shipping, insurance and freight data from the Gulf show any change in actual flows through the strait.

West Texas Intermediate (WTI) crude was down 22 cents at $86.70, but the commentary argued that momentum in the talks had clearly been lost, leaving what it described as clear upside risks for oil prices from current levels.