Oil prices rose sharply Tuesday after U.S. military strikes in Iran undermined hopes for a near-term agreement between Washington and Tehran that could reopen shipping through the Strait of Hormuz and ease global supply disruptions.
Brent crude climbed $3.44, or 3.6%, to settle at $99.58 per barrel. U.S. West Texas Intermediate (WTI) crude, however, fell $2.71, or 2.8%, to close at $93.89, as U.S. markets were catching up after being closed Monday for the Memorial Day holiday.
The latest market reversal came after Iran accused the United States of violating a fragile ceasefire by carrying out strikes in southern Iran’s Hormozgan province. Iranian media reported explosions in the region, while U.S. Secretary of State Marco Rubio said negotiations toward a broader agreement could still take “a few days.”
The conflict has severely disrupted traffic through the Strait of Hormuz, a critical route for roughly 20% of global oil and liquefied natural gas shipments. Iran has largely blocked non-Iranian vessels from using the waterway since the war began in late February.
Despite those restrictions, shipping data showed several vessels recently transited the strait, including LNG tankers headed to Pakistan, China, and India, along with a supertanker carrying Iraqi crude to China after months stranded in the Gulf.
Analysts said markets remain highly sensitive to developments surrounding ceasefire talks and regional military activity.
“We are still waiting for more details on a potential deal,” UBS analyst Giovanni Staunovo said. “Meanwhile we see renewed tensions in the Middle East, while flows through the Strait remain restricted.”
The U.S. strikes occurred while Iranian officials were in Doha meeting with Qatari mediators in an effort to revive negotiations over a temporary framework that could reduce hostilities and reopen shipping routes while broader talks continue.
Meanwhile, maritime security concerns remain elevated. United Kingdom Maritime Trade Operations reported that a tanker near Oman experienced an external explosion close to the vessel’s waterline.
The ongoing conflict and supply disruptions continue to raise concerns about inflation and economic growth worldwide, as higher energy prices increase pressure on consumers and central banks.