Oil prices remained above $110 per barrel on Tuesday as investors weighed reports of a tanker fire near Dubai against indications that U.S. President Donald Trump may be considering winding down military operations against Iran.
As of 04:49 ET (08:49 GMT), Brent crude futures for May delivery, the global benchmark, edged up 0.1% to $112.87 per barrel, while West Texas Intermediate (WTI) futures fell 0.4% to $102.49 per barrel.
Crude prices initially spiked earlier in the session after a Kuwaiti oil tanker caught fire near Dubai’s port area. The vessel’s owner said the blaze was the result of an Iranian attack.
However, gains eased somewhat after a Wall Street Journal report said Trump had told advisers he might be willing to end the military campaign against Iran even if the Strait of Hormuz remains closed. According to the report, Trump and his team believe that reopening the crucial waterway would likely take far longer than the four-to-six-week timeline originally envisioned for the conflict.
Instead, Washington may seek to reduce hostilities after achieving its primary objectives, including weakening Iran’s naval capabilities and damaging its missile systems. The U.S. would then try to persuade Tehran through diplomatic channels to reopen the strait and could also encourage European and Gulf allies to take the lead in restoring shipping access.
A potential reduction in U.S. military activity could mark a step toward de-escalation, particularly as Iranian officials have previously demanded such a move before engaging in direct negotiations with Washington.
Nevertheless, a prolonged shutdown of the Strait of Hormuz would continue to threaten global oil supplies, given that around 20% of the world’s crude passes through the narrow passage.
Oil on track for one of its largest monthly gains
Both Brent and WTI crude were heading for a dramatic increase in March, with prices projected to rise between 50% and 54%, representing one of the strongest monthly performances on record.
The rally reflects growing risk premiums and fears of supply disruptions tied to the conflict with Iran. Tehran has effectively blocked the Strait of Hormuz and has targeted oil tankers and energy infrastructure in neighboring Persian Gulf states, intensifying concerns about sustained disruptions to crude supply.
Several Gulf nations have temporarily halted oil production and exports over the past month as the conflict escalated.
Conflicting signals about the state of the war have also contributed to market volatility. Iranian officials have repeatedly stated that no direct talks with the United States have taken place since the conflict began, contradicting claims from Washington that negotiations were progressing.
Meanwhile, the United States has reportedly deployed thousands of additional troops to the Middle East. President Trump has also reiterated threats to strike Iran’s energy infrastructure and potentially water facilities if the Strait of Hormuz is not reopened by April 6.
Diplomatic efforts to ease tensions are ongoing, with Pakistan offering to host regional ceasefire negotiations in Islamabad.
Over the weekend, Yemen’s Iran-backed Houthi movement entered the conflict by launching attacks against Israel, raising concerns that the war could widen further, particularly given the group’s ability to target vessels traveling through the Red Sea.
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