Oil Prices Rise as US–Iran Conflict Remains Unresolved
Oil prices climbed nearly 2% on Tuesday, extending gains from the previous session, as efforts to end the conflict between the United States and Iran remain stalled. The ongoing disruption in the Strait of Hormuz continues to restrict energy flows from the Middle East, limiting supply to global markets.
Diplomatic Deadlock Keeps Markets on Edge
Donald Trump has reportedly expressed dissatisfaction with Iran’s latest proposal aimed at ending the conflict. According to officials, the proposal avoids addressing Tehran’s nuclear program until hostilities cease and shipping disputes in the Gulf are resolved.
This lack of progress has prolonged the standoff. Iran continues to restrict shipping through the Strait of Hormuz—responsible for roughly 20% of global oil and gas supply—while the United States maintains its blockade on Iranian ports.
Oil Benchmarks Extend Gains
Brent crude futures for June rose by $2.32, or 2.1%, reaching $110.55 per barrel. This follows a 2.8% gain in the previous session, marking the highest close since early April and extending a seven-day rally.
Meanwhile, West Texas Intermediate crude advanced $1.80, or 1.9%, to $98.17 per barrel after posting gains in the prior session.
Failed Negotiations and Ongoing Disruptions
A previous round of direct negotiations between Washington and Tehran collapsed last week after unsuccessful face-to-face talks. Analysts note that current discussions around peace remain largely superficial, with no clear signs of de-escalation.
Shipping data highlights the severity of the disruption, with multiple Iranian oil tankers forced to turn back due to the U.S. blockade. However, some movement persists, as a liquefied natural gas shipment managed by Abu Dhabi’s national oil company successfully crossed the Strait and is reportedly heading toward India.
Before the conflict escalated, approximately 125 to 140 vessels passed through the Strait daily, underlining the scale of the current disruption.
Oil Prices Expected to Stay Elevated
Market analysts increasingly view current oil price levels as a new baseline. According to industry expectations, a prolonged “ceasefire limbo” scenario—without a clear resolution—could keep oil trading between $100 and $125 per barrel.
In such an environment, prices are likely to trend higher as physical supply constraints catch up with financial markets. Over time, the conflict may become normalized in market pricing, leading to reduced volatility but maintaining a structurally higher price range.
