Oil Prices Ease as Gulf Exports Rebound, Ceasefire Uncertain
Oil prices reversed earlier Tuesday’s gains as investors weighed signs of recovering crude supplies from major Middle Eastern producers against uncertainty surrounding U.S.-Iran ceasefire efforts.
Crude prices reacted to conflicting statements from the US and Iran regarding diplomatic efforts to end the conflict and reopen the Strait of Hormuz, keeping supply concerns and the risk premium in global oil markets elevated.
Brent crude futures fell 1.8% to $103.43 a barrel, while the December contract fell 1.8% to $96.11 a barrel. The November Brent contract expires Tuesday, with December set to become the front-month contract. West Texas Intermediate fell 2.2% to $90.61 a barrel.
The increase came as diplomatic contacts continued over a possible agreement between the US and Iran, with uncertainty over the reopening of the Strait of Hormuz keeping supply risks in focus.
Mediators are pressing Iran to make concessions on its nuclear program in an effort to revive ceasefire negotiations with the US, The Wall Street Journal reported.
The initiative follows US President Donald Trump’s rejection of an Iranian proposal for a seven-day ceasefire that would have included the reopening of the Strait of Hormuz and an end to the US blockade of Iranian ports, according to the Journal.
A US official told American news outlets Axios and CNN that Trump is willing to offer economic sanctions relief and release frozen funds to Iran in exchange for concrete progress related to its nuclear program.
Washington is engaging in “positive and constructive” talks via mediators, CNN quoted a US official as saying, emphasizing that negotiators would not finalize an agreement unless nuclear-related concerns were fully resolved.
Meanwhile, Iranian Foreign Minister Abbas Araghchi said late Monday that Qatari mediators will present the US with new ideas discussed with Tehran on how to meet Iran’s conditions for reopening Hormuz, adding that a final response from Washington could come Tuesday.
Separately, continued attacks targeting energy infrastructure in the Russia-Ukraine war are also fueling concerns over global supply, putting further upward pressure on prices.
Ukrainian President Volodymyr Zelenskyy said in a social media post on Monday that attacks had been carried out against various defense and oil facilities in Russia.
Following his meeting with Trump last week, Zelenskyy said Kyiv was ready for an energy ceasefire if Russia refrained from targeting Ukraine’s energy infrastructure.
