SINGAPORE - Oil extended gains on reports that Iran attacked “hostile targets” in the Strait of Hormuz, with Tehran seeking to bar US ships from the critical waterway in a deal with Oman.Brent crude surged 1.4 per cent to US$83.62 a barrel as at 8.24am, after jumping 4.9 per cent in the previous session. US West Texas Intermediate rose 1.2 per cent to US$78.25.The attacks took place on Aug 6 night local time following explosions near Qeshm Island in Hormuz, according to the semi-official Fars News Agency.Crude has erased the bulk of the declines from earlier in the week as optimism evaporated that a full reopening of Hormuz would see a resumption of energy flows from the Persian Gulf. Under the proposed Iran-Oman agreement, Tehran intends to also ban Israeli ships from the strait and require compensation from hostile countries to use it.“Deals to reopen the Strait of Hormuz remain elusive, with investors teetering in the balance,” said Rob Haworth, senior investment strategy director at US Bank Asset Management Group. “For now traffic remains low and the path to a durable deal remains unclear.”While President Donald Trump reiterated that he thinks the war will end “pretty soon,” the parties in the conflict remain far apart on conditions for an accord. The US has insisted on free transit through the strait and a return to the pre-war status quo, while Iran is pushing for a fee structure. The conflict in the Middle East appears to be widening, with Iran-backed Houthis saying they conducted a “large-scale” attack against forces from Yemen’s Saudi-aligned government. The militant group earlier this week said it attacked a Saudi tanker in the Gulf of Aden and threatened shipping in the northern Red Sea. BLOOMBERG