Oil prices remained elevated today as markets looked for signals that a shaky truce between the United States and Iran will be extended.

Brent crude traded near $100 per barrel, and the dollar held gains from the previous session after Iran said the US had violated a ceasefire.

Japan’s Nikkei share gauge jumped to a record level, following all-time highs on Wall Street on AI optimism as the US reopened after a holiday. Sentiment remains vulnerable, however, as talks continue to reach a lasting halt to the three-month-long conflict that has rocked energy markets, and central banker comments will be watched for how the crisis is impacting the picture for inflation and interest rates.

The United Nations Security Council on Tuesday condemned the attack ⁠on Barakah Nuclear Plant in the United Arab Emirates, according to ⁠a statement, adding that ⁠the attack constituted a violation ⁠of international law.

The council did ⁠not attribute ‌blame for the attack.

The UAE said last ‌week that six ‌drones had been launched against it from ⁠Iraq, including one that caused a fire at the nuclear power plant in the Gulf state.

Iraq is ‌home to powerful Iranian-backed militia groups ‌which have ⁠claimed attacks against “enemy ⁠bases in Iraq and ‌the region” during ‌the US-Israeli war on Iran.

Israeli troops have clashed with Hezbollah along the Litani River in southern Lebanon as Israel pushed farther north, a day after prime minister Benjamin Netanyahu ordered an expansion of military operations and one of the heaviest nights of strikes since a US-brokered ceasefire began in mid-April.

The Israeli military said it struck more than 100 Hezbollah sites across southern Lebanon and the eastern Bekaa Valley overnight, targeting storage facilities, command centres and observation points. One strike on the eastern village of Mashghara killed 12 people, including several members of the same family, Lebanon’s state-run National News Agency said. Israel also warned residents of the city of Nabatiyeh to leave on Tuesday and struck an area near the Qaraoun Dam, the country’s largest along the Litani River, though the Litani River Authority said there was no direct damage to the dam.

Israel has called up an additional battalion to Lebanon, an Israeli security official said on condition of anonymity. Mr Netanyahu said Israel was “operating with large forces on the ground and seizing strategic areas” and vowed to “increase the blows, increase the intensity.”

At least 3,213 people have been killed in Lebanon since the start of the war, according to Lebanon’s health ministry, with over 9,700 wounded. More than one million people have been displaced. According to Mr Netanyahu’s office, 23 Israeli soldiers and a defence contractor have been killed in or near southern Lebanon.

At least 31 people have been killed, including several children, in a heavy wave of Israeli strikes across southern and eastern Lebanon, Lebanon’s health ministry said, after prime minister Benjamin Netanyahu vowed to “press the pedal even harder” against Hezbollah.

The Israeli military said it struck more than 100 Hezbollah infrastructure sites overnight in one of the heaviest bombardments since a US-brokered ceasefire began in mid-April. Strikes hit the Bekaa Valley village of Mashghara, where 11 people including a woman and two children were pulled from rubble, and Burj al-Shamali in the south. Some strikes hit near Beaufort Castle, a nearly 900-year-old UNESCO-recognised medieval fortress.

Speaking at a security cabinet meeting on Tuesday, Mr Netanyahu said Israel was “deepening our operation in Lebanon” and that the IDF was “operating with large forces on the ground and seizing dominant terrain.”

Hezbollah said it targeted three barracks and a military post in northern Israel in response. Israeli strikes have killed at least 3,185 people in Lebanon since the conflict began on 2 March, according to Lebanon’s health ministry.

Gas prices have decreased in most US states, but the price relief may be short-lived if negotiations between the US and Iran sour.

Patrick De Haan, the head of petroleum analysis at GasBuddy, noted on Monday that gas prices had fallen to a national average of $4.45 per gallon, while diesel had fallen to a national average of $5.56 per gallon, which was beyond more optimistic predictions heading into the week. According to AAA, the national average for gasoline last week was $4.53 per gallon, and $5.65 per gallon for diesel.

“Average #gasprices continue to fall beyond what seemed optimistic a week ago”, he wrote in a post on X.

He noted that a prospective deal between the Trump administration and Tehran to end the war in Iran may have helped delay the expected volatility, including any potential increase, in prices, as markets wait to see the outcome of the talks. It is “too early to say how long the drop continues”, De Haan added.

On Tuesday, the national average price for gasoline rose to $4.49 per gallon. Diesel was up slightly to $5.58 per gallon.

“The Iranians have exceeded all timelines the IC [the intelligence community] had for reconstitution,” one official said.

Top Iranian diplomat and parliamentary speaker Mohammed Bagher Ghalibaf said on Wednesday that the country had used the opportunity to “rebuild” its strength and military capability.

The news came before US strikes on Iran resumed on Tuesday morning.

The military cast the strikes as defensive actions designed to “protect our troops from threats posed by Iranian forces” and US secretary of state Marco Rubio said the Strait has to be open “one way or the other”.

Iran has deployed small surface vessels to lay mines across parts of the Strait of Hormuz in a bid to control traffic through the vital waterway, which usually handles around a fifth of global oil and liquified natural gas trade, since the war erupted on 28 February.

Negotiations for a comprehensive peace deal with Iran could “take a few days,” US Secretary of State Marco Rubio has said, tempering expectations for an imminent resolution to the nearly three month-old conflict in the Middle East.

While Iran’s foreign ministry spokesperson indicated that conclusions had been reached on many points within a potential 14-point memorandum of understanding, officials stressed this does not signal a swift end to the conflict.

You can read more about what a deal may look like from James C. Reynolds below: