Oil prices are trading higher on Tuesday morning amid concerns that the United States and Iran remain far from reaching an agreement to end the war, after crude suffered sharp losses in the previous session following reports by Axios that President Donald Trump may give Iran more time to find a diplomatic solution before resuming strikes against the country.

Brent crude, the European benchmark, was up 1.58% to $106.43 per barrel after plunging around 8% in Monday’s session, while West Texas Intermediate (WTI), the US benchmark, advanced 1.52% to $97.93 per barrel.

Iran’s president said the country’s supreme leader had granted the government expanded powers to negotiate, while President Donald Trump signalled progress in the talks.

Even so, smaller-scale attacks continued. On Monday, 2 November, US forces struck the Iranian island of Qeshm, at the entrance to the Strait of Hormuz, the Wall Street Journal reported, citing US officials. Iran’s state news agency IRNA reported five explosions on the island.

“Given the high level of tension, it does not make much sense to see price declines” such as Monday’s drop, Karen Young, a senior research scholar at Columbia University’s School of International and Public Affairs, told Bloomberg. “But the news flow is causing swings in the markets, which means prices could surge again if we see an escalation in US and Israeli military strikes against Iran,” she added.

Monday’s sell-off came just ahead of US voters heading to the polls for midterm elections, at a time when Trump and the Republican Party face growing political pressure over rising energy prices driven by the conflict. Trump has repeatedly stated he will resolve the conflict one way or another, while threatening to resume strikes against Iran after the elections.