Oil prices rose two per cent on Tuesday (May 12) as hopes for a deal to end the US-Israeli war on Iran faded, with stark differences between Tehran and Washington on a peace proposal bringing supply concerns again to the fore.

Brent crude futures were up US$2 (S$2.55), or 1.9 per cent, at US$106.21 per barrel, while US West Texas Intermediate gained US$2.31, or 2.4 per cent, to US$100.38 by 0726 GMT.