Oil prices rise again as Trump’s Iran deadline nears and ceasefire hopes fade

Oil prices pushed higher during Asian trading on Tuesday as markets prepared for the possibility of escalating tensions in the Middle East ahead of U.S. President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz.

At 03:15 ET (07:15 GMT), Brent crude futures for June delivery had gained 1.5% to $111.37 per barrel, while U.S. West Texas Intermediate (WTI) crude futures climbed 2.2% to $114.85 per barrel.

The increases marked the third consecutive day of gains, driven by mounting concerns over the Strait of Hormuz—a crucial maritime passage that typically handles around one-fifth of global oil shipments.

On Monday, Iran rejected a U.S.-supported proposal that included a 45-day ceasefire and a gradual reopening of the strait, along with broader negotiations over sanctions relief and post-conflict reconstruction.

Instead, Tehran demanded a permanent ceasefire, binding guarantees against future attacks, the lifting of sanctions, and compensation for damages.

Trump reiterated that the Tuesday deadline of 8 p.m. ET would not be extended and warned that failure to comply could lead to U.S. military strikes targeting Iranian infrastructure, including bridges and power plants.

He said Iran could be “taken out” quickly, emphasizing the increasing risk of a broader regional escalation.

The sharper tone in Washington has left energy markets on edge, with traders factoring in the risk of further supply disruptions across the Gulf.

Media reports indicated that Iran and Israel exchanged attacks on Tuesday, highlighting the lack of progress toward a diplomatic resolution.

Recent disruptions to tanker traffic have already tightened expectations for global supply and increased the risk premium embedded in oil prices.

Although OPEC+ has announced modest production increases, analysts say the additional output is unlikely to materialize in practice due to ongoing logistical and operational constraints.

“With the Strait of Hormuz effectively shut, higher quotas remain largely notional for producers, including Iraq, Kuwait, Saudi Arabia and the UAE, until the route reopens,” ING analysts said in a note.