Brent crude closed above $90 per barrel on Monday as Iran threatened to launch a military offensive in the Strait of Hormuz if diplomatic efforts to end its war with the United States fail.

The benchmark Brent crude was quoted at $90.53 per barrel as of Monday evening, gaining $2.01, or 2.27 per cent, according to oilprice.com. US West Texas Intermediate crude also climbed to $84.25 per barrel, up $1.85, or 2.25 per cent.

According to Reuters, the rise followed renewed tensions around the strategic Strait of Hormuz after a senior Iranian official told the news agency that Tehran had shifted its policy from defensive to “fully offensive” because of a deadlock in efforts to secure a permanent end to the war.

The official said Iran was prepared to take military action in the Strait of Hormuz if diplomatic efforts failed. “Iranian entities must be prepared to escalate tensions in the Strait of Hormuz and wider region, as Iran will be ready to make decisions and take action on difficult decisions,” the official told Reuters.

He added that Tehran would conduct a “timely and precise” military attack to break the United States naval blockade if diplomacy failed.

The development threatens to further disrupt tanker movements through Hormuz, a key global energy corridor, at a time when efforts to restore oil traffic through the waterway have stalled.

According to Reuters, progress towards peace talks and the resumption of oil tanker traffic through the Strait of Hormuz has ground to a halt, with neither side showing signs of moving towards an end to the conflict.

The latest escalation came on the day Iran and the United States were expected to reach a final agreement under a memorandum of understanding signed in June.

The June 17 memorandum provided a 60-day timeframe for Washington and Tehran to reach a broader agreement concerning Iran’s nuclear programme and US sanctions.

The interim agreement, which called for the “immediate and permanent termination of military operations on all fronts”, however, quickly collapsed over disagreements concerning control of the Strait of Hormuz.

The waterway, which is shared by Iran and Oman, is a major route for global energy supplies. It was reported that about a fifth of global oil and liquefied natural gas flowed through the strait before the war.

Tehran maintains that the June agreement gave it the right to manage the waterway, while Washington rejected that interpretation.

The dispute subsequently contributed to the resumption of hostilities, with Iran firing on vessels it said were attempting to sail through the strait using an unauthorised route.

US President Donald Trump subsequently declared on July 7 that the agreement was over.

The Iranian official told Reuters that Tehran had now given the United States only a short period to implement all the provisions of the agreement before further negotiations could take place.

“Within the short period of a few weeks set by Iran, all the agreement’s provisions must be implemented by the U.S. This is a precondition for further negotiations with the US,” the official said.

Mediators are expected to communicate Iran’s deadline to Washington and other regional countries. Iran is also separately negotiating with Oman over the management of the Strait of Hormuz, with Tehran saying the two countries are close to an agreement despite slow progress.

The situation was further complicated by Trump’s warning to Oman during a phone interview with Fox News on Monday. “If Oman gets in the way, we’ll bomb the shit out of them,” Trump said, according to Reuters.

Earlier, Trump said Iran should surrender, telling Fox News that Tehran “should put up the white flag of surrender”. The renewed threats have heightened concerns over the security of shipping through Hormuz and helped push crude prices higher on Monday.

The price movement also comes after oil had traded below the $80 mark earlier in the month amid expectations that tensions around the waterway could ease. Monday’s Brent price of $90.53 therefore represented a fresh rise above the $90 threshold, while WTI stood at $84.25 per barrel.