Oil prices surged on Tuesday after fresh U.S. military action against Iran raised concerns that efforts to secure a peace agreement and fully restore shipping through the Strait of Hormuz could face further delays.
U.S. Secretary of State Marco Rubio said on Tuesday that finalizing a deal with Iran may “take a few days,” cooling expectations of an immediate breakthrough after Washington launched what it described as defensive strikes in southern Iran a day earlier.
“We are still waiting for more details on a potential deal,” said Giovanni Staunovo at UBS. “Meanwhile we see renewed tensions in the Middle East, while flows through the Strait remain restricted.”
Brent recovers strongly amid renewed supply concerns
Brent crude futures rose $3.04, or 3.2%, to $99.18 a barrel by 08:20 GMT after plunging 7% during the previous trading session.
Meanwhile, U.S. West Texas Intermediate crude traded at $92.53 a barrel, down $4.07, or 4.2%, from Friday’s close. No official WTI settlement was recorded on Monday because of the U.S. Memorial Day holiday.
Doha negotiations remain in focus as shipping disruptions persist
“While differences between the parties have narrowed, any eventual peace deal would likely lead only to a gradual reopening, meaning the current tight supply outlook could take months to normalize,” said Ole Hansen at Saxo Bank.
Since the conflict erupted, Tehran has effectively halted nearly all non-Iranian shipping traffic moving through the Strait of Hormuz, disrupting roughly 20% of global oil and liquefied natural gas supplies.
The latest strikes came as Iran’s chief negotiator and foreign minister met with Qatar’s prime minister in Doha to discuss a possible agreement with the United States aimed at ending the three-month war.
Officials in both Washington and Tehran said progress had been made on a memorandum of understanding that would pause the conflict and allow negotiators 60 days to reach a final agreement.
Reports indicate potential phased reopening of Hormuz
According to Japanese newspaper Nikkei, citing a diplomatic source from the Middle East, Iran would begin clearing mines from the Strait of Hormuz within 30 days under the proposed framework.
The report added that vessels from all countries would then be allowed to move through the waterway freely and securely, while Tehran would also end transit-fee charges.
Shipping data showed that three LNG carriers recently crossed the Strait heading toward Pakistan, China and India, alongside a supertanker carrying Iraqi crude to China that had remained stranded for almost three months.
Trump says agreement risks collapsing at final stage
U.S. President Donald Trump repeated on Monday his call for Iran to surrender its enriched uranium stockpiles so they can be destroyed.
“It’s a sharp reminder that the deal could still collapse at the 11th hour, much like the five previous attempts before it,” said Tony Sycamore, market analyst at IG Group.
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