Crude oil prices rose on Monday after Iran ruled out talks to extend its memorandum of understanding with the United States.

Meanwhile, a senior Iranian official told Reuters that Tehran would shift from a defensive to an offensive strategy if diplomatic efforts with Washington fail.

U.S. crude oil futures rose 2.8 per cent to $84.70 per barrel, while Brent crude, the international benchmark, also gained 2.8 per cent to $91.03 per barrel.

The Iranian official said that Iranian entities should be prepared for an escalation of tensions in the Strait of Hormuz and the wider region, as Tehran would be ready to make difficult decisions and take action.

The U.S. and Iran agreed to a memorandum of understanding on June 17 aimed at keeping the Strait of Hormuz open while the two countries negotiated a final agreement on Tehran’s nuclear programme within 60 days.

The deadline for reaching a deal expires on Monday.

Iran’s Foreign Ministry spokesman, Esmail Baghaei, ruled out any talks to extend the memorandum of understanding, according to the state-run Tasnim news agency.

“We did not start any negotiations at all, and the U.S. violated the understanding from the very beginning; therefore, the 60-day issue is not relevant,” Baghaei said, according to Tasnim.

Meanwhile, President Donald Trump called on Iran to “put up the white flag of surrender” in an interview with Fox News.

He also threatened to bomb Oman, a U.S. ally, over its negotiations with Tehran on managing traffic through the Strait of Hormuz.

“If Oman gets in the way, we’ll bomb the sh— out of them,” Trump told Fox.

Ship traffic through the Strait of Hormuz was nearly at a standstill on Sunday, with only three vessels crossing the strategic waterway, according to Kpler data.