Oil prices remained volatile on Tuesday as optimism surrounding possible progress in US-Iran talks was overshadowed by fresh American military strikes in Iran, renewing concerns over stability in the Middle East and global energy supplies.
Brent crude rose 2.35% to trade at $98.40 per barrel, while the US benchmark West Texas Intermediate (WTI) slipped 5.46% to $91.33 a barrel, though it continued hovering near the $90 mark.
The mixed market reaction followed a brief decline in oil prices a day earlier, when crude had fallen below the $100 level amid hopes that the Strait of Hormuz could reopen as negotiations between Washington and Tehran appeared to be advancing.
Investor sentiment had improved after US President Donald Trump said talks with Iran over an interim arrangement to extend the ceasefire and reopen the strategic shipping route were “proceeding nicely.” The remarks, posted on Truth Social, fuelled expectations of a possible diplomatic breakthrough.
US Secretary of State Marco Rubio also hinted at potential progress during remarks in New Delhi, saying, “We thought we might have some news last night. Maybe today.”
Despite the diplomatic signals, tensions escalated further after US Central Command announced strikes on missile launch sites in southern Iran and on boats allegedly attempting to place naval mines.
According to US Central Command spokesman Captain Tim Hawkins, the strikes were defensive operations aimed at protecting American forces from threats posed by Iranian military units.
Fresh clashes were also reported in the Strait of Hormuz, where US and Israeli fighter jets allegedly targeted Iranian vessels south of Larak Island. Iran’s state-run Nour News reported casualties among Iranian personnel, though no detailed figures were released.
The renewed escalation has cast uncertainty over the ceasefire that came into effect on April 8, especially as markets had begun pricing in the possibility of a longer truce and the gradual reopening of the Strait of Hormuz.
The crucial waterway has remained largely shut since late February after US and Israeli strikes on Iran triggered a broader regional conflict. Iran subsequently tightened control over the strait, through which nearly 20% of global oil supplies pass.
The conflict, which began on February 28, is now nearing the three-month mark, continuing to keep global energy markets volatile and investors cautious.
