At the same time, Asian shares drifted on protracted uncertainty over the global inflation outlook.

US President ‌Donald Trump on Monday responded to Iran’s conditions for a peace deal with his own demands that Iran pay compensation for people killed in wars, attacks and protests, in a rhetorical escalation likely to complicate efforts to reopen the crucial waterway.

Brent crude futures edged up to hit $88.00 per barrel and US crude futures ticked up to $82.45, both the highest levels since July ​31, after the contracts rallied roughly 5% on Monday.

“We’re now in a bit of a Mexican standoff, if you’d like, in terms of ​who blinks first,” said Tony Sycamore, a market analyst at IG.

“This is going to be almost a war of attrition ⁠now,” he said. “You probably can see the (oil) market sitting around the $75-95 range while we wait to see who blinks first.”

The latest uptick in fuel costs raises ​the stakes for the US July consumer price report due on Wednesday, where expectations are for a monthly rise of 0.1% in the headline reading and ​0.2% for the core measure.

Any upside surprise could rekindle bets of a Federal Reserve rate hike next month, with the odds currently a coin toss.

“We think the risks are skewed towards a hot print, which would probably drive a rebound in rate expectations and, potentially, renewed worries about stagflation,” said Jonas Goltermann, chief markets economist at Capital Economics.

“Overall, our assessment remains ​that the U.S. economy is running a bit hotter than a ‘goldilocks’ situation. That points to higher interest rates.”

Trading of cash US Treasuries was closed in ​Asia on Tuesday owing to a holiday in Japan, but futures fell slightly, implying higher yields.

Down Under, the Reserve Bank of Australia is due to announce its policy decision later ‌on Tuesday, ⁠where expectations are for the central bank to keep rates on hold.

MSCI’s broadest index of Asia-Pacific shares outside Japan swung between losses and gains and was last up 0.2% while South Korea’s Kospi rose 0.3%, as the latest escalation in Gulf hostilities kept market sentiment fragile.

Nasdaq futures edged 0.28% higher while S&P 500 futures added 0.1% after Wall Street ended lower in Monday’s cash session.

EUROSTOXX 50 futures slipped 0.05%, while FTSE futures and DAX futures were flat.

Overnight, Nvidia said it has ​partnered with six major financial institutions ​to launch compute financing platforms aimed at ⁠raising over $500 billion in third-party capital for AI infrastructure, underscoring the scale of the sector’s investment boom.

“A small part of me was left wondering whether this is how it felt when sub-prime mortgages first became a mainstream product - the ​innovation that eventually helped trigger the GFC,” said IG’s Sycamore.

In currencies, the yen was back in the spotlight, struggling ​on the weaker side ⁠of 159 per dollar and well away from last week’s high of 155.20 following several suspected rounds of intervention, including a joint one by Japan and the United States.

“The market likely remains vigilant about further joint US-Japan yen-buying intervention, so USD/JPY breaching 160 in the very near term seems unlikely,” said analysts at Nomura in a note.

“However, ⁠the latest ​price action indicates there are quite a lot of USD/JPY dip-buyers, after the pair reached the ​156-157 range for the first time since May.”

The dollar got a marginal lift from the renewed climb in oil prices, keeping the euro away from a 1-1/2-month high as it last traded ​at $1.1546, while sterling eased from Monday’s one-month top and changed hands at $1.3512.

Elsewhere, spot gold was up 0.5% to $4,409.81 an ounce.