The price of the global benchmark Brent crude oil rose by about 1.4% to $111.33 per barrel, while oil traded on the U.S. exchange increased by 2.8% to $115.61.

On Monday, Trump threatened to destroy Iran "in one night" if it fails to reach an agreement with the U.S. by 20:00 Washington time on Tuesday.

Oil and gas shipments from the Middle East have been severely disrupted as Tehran threatens to attack ships attempting to use the strait in retaliation for U.S. and Israeli airstrikes since February 28.

Speaking at the White House, Trump said he believes "reasonable" leaders in Iran are negotiating in "good faith," but the outcome remains uncertain.

Iran has so far rejected proposals for a temporary ceasefire, demanding a permanent end to the war and the lifting of sanctions against the country.

Today's price increase suggests that investors believe it may be harder for the U.S. than expected to reach a deal due to Iran's hardline stance, and the war could be prolonged.

Meanwhile, traders are also trying to discern whether Trump genuinely wants a deal or is merely "putting up a smokescreen" while preparing for a larger attack.

Before the deadline on Tuesday, the United Kingdom will host a meeting of allied military planners and partners to discuss measures to secure the Strait of Hormuz after the conflict ends.

Disruptions on the key shipping route have led to rising energy prices worldwide and raised concerns about higher global inflation.

Approximately one-fifth of the world's oil and gas shipments typically pass through the narrow waterway.

Major Asian economies, including Japan and South Korea, have been particularly affected by the disruptions due to their heavy reliance on Middle Eastern energy.

Although some ships have used the strait in recent weeks, it has been to a much lesser extent than before the conflict.

Trump has also called on countries to send warships to the region to ensure more vessels can safely navigate the waterway.

Several countries have negotiated with Iran to secure safe passage for their ships through the strait.