HONG KONG, July 20 -- Oil scaled back gains after hitting its highest price in a month on Monday as Iran said diplomatic exchanges with the United States were ongoing via mediators despite renewed conflict in the Middle East.

Crude has surged over the past week as Washington and Tehran traded fire, raising fears of a sustained disruption in the Strait of Hormuz, which normally carries around a fifth of the world's seaborne oil.

Both Brent crude and US benchmark West Texas Intermediate extended their gains after climbing more than four per cent at the end of last week.

Brent was trading at US$89 (RM364.23) a barrel after rising above US$91 (RM372.41), its highest price since June 11.

The latest moves came after Iran indicated that dipl...