Oil prices moved higher on Tuesday, gaining roughly 3% as uncertainty around peace talks between the U.S. and Iran supported a renewed risk premium ahead of the ceasefire deadline. Brent crude rose $3.00, or 3.1%, to settle at $98.48 per barrel, while U.S. West Texas Intermediate (WTI) gained $2.52, or 2.8%, to close at $92.13. Prices trimmed earlier gains of around 5% as mixed signals emerged around the timing and participation in upcoming negotiations.
The market remains focused on whether talks will materialize before the ceasefire expires, with Iran yet to confirm its attendance. At the same time, U.S. messaging has signaled readiness to escalate if a deal is not reached, reinforcing uncertainty around the near-term outlook.
Supply conditions remain highly constrained. Traffic through the Strait of Hormuz continues to run at minimal levels, with only a handful of vessels transiting the waterway in the past 24 hours. The prolonged disruption has already removed a significant volume of oil from the market, tightening global balances.
Broader regional tensions also persist, adding to geopolitical risk. Meanwhile, global markets are beginning to feel the economic effects of higher energy prices, with signs of strain emerging across Europe and continued strength in U.S. fuel-driven spending.
On the supply side, attention is turning to weekly U.S. inventory data, with expectations for another crude draw that would signal ongoing demand strength and limited near-term supply relief.
Overall, oil markets remain highly reactive, with price direction tied closely to developments around negotiations, the status of the ceasefire, and the pace at which disrupted supply may eventually return.