Oil prices continued to rise on Tuesday morning, recovering from significant losses after a steep decline in the previous session, as energy market players evaluated the situation regarding the Iran conflict.
The international benchmark Brent crude futures for May delivery rose by 2.4% to $102.31 per barrel, while U.S. West Texas Intermediate futures for May increased nearly 3.6% to $91.27 per barrel.
This increase follows a substantial sell-off on Monday, when Brent crude dropped approximately 11% to around $99 per barrel after surging past $112 on Friday.
“I AM PLEASED TO ANNOUNCE THAT THE UNITED STATES OF AMERICA AND THE NATION OF IRAN HAVE ENGAGED IN VERY PRODUCTIVE DISCUSSIONS OVER THE LAST TWO DAYS REGARDING A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST,” U.S. President Donald Trump stated Monday in a Truth Social post.
“I HAVE DIRECTED THE DEPARTMENT OF WAR TO DELAY ANY AND ALL MILITARY ACTIONS AGAINST IRANIAN POWER PLANTS AND ENERGY INFRASTRUCTURE FOR A FIVE-DAY TIME FRAME,” Trump indicated.
Trump’s announcement caused a drop in oil prices, while stock markets surged. Nonetheless, the rebound on Tuesday reflects ongoing skepticism regarding Trump’s assertions, which were also denied by Iran.
“Despite the enthusiasm on Wall Street, ladies and gentlemen, oil prices remain significantly above their lows after Tehran rejected allegations of weekend negotiations with Washington,” noted José Torres, senior economist at Interactive Brokers, who emphasized that the risk of a prolonged conflict remains a major concern for the market.
Torres pointed out that continuous assaults on essential energy infrastructure in the Middle East have heightened fears about possible production and transportation disruptions.
“Moreover, considering the extensive range of attacks impacting critical energy in the Middle East… there’s apprehension that capacity and transportation interruptions could keep costs elevated compared to the start of the year, even if an agreement is reached,” he stated in a note published on Tuesday.
The Strait of Hormuz was responsible for approximately 20% of global maritime oil shipments prior to the outbreak of the conflict when Iran effectively halted flows through this vital passage.
Iranian state media reported on Sunday that Tehran would allow safe passage through the strait, except for vessels linked to its “enemies.”
