Oil prices remained relatively stable on Tuesday, maintaining the robust gains observed on Monday, as market participants continued to evaluate the uncertainties linked to the U.S.-Iran ceasefire discussions and the potential reopening of the Strait of Hormuz. Brent crude futures increased by 6 cents, representing a 0.06% rise, reaching $95.04 per barrel. In contrast, U.S. West Texas Intermediate crude experienced a decline of 17 cents, or 0.18%, settling at $91.99 per barrel. Both benchmarks experienced a surge exceeding 5% in the prior session, although they subsequently relinquished a portion of those gains.

The pullback occurred following U.S. President Donald Trump’s statement indicating he had not been made aware of Iran’s suspension of discussions with Washington. He also stated that Israel had consented to withdraw troops that were poised for an offensive in southern Lebanon. The remarks came in the wake of contradictory indications regarding the progress of negotiations. While Trump stated on Monday that discussions with Iran were ongoing, Iran’s Tasnim news agency reported that Tehran had ceased indirect negotiations with Washington. In a distinct interview, Trump stated that he would not be opposed to the conclusion of the negotiations. However, shortly afterward, he communicated via social media that discussions were still in progress. He also informed that he anticipated an agreement to extend the ceasefire and reopen the Strait of Hormuz “over the next week,” as reported by the outlet on X.

The market remains attentive to the potential outcomes of the U.S.-Iran negotiations, weighing the likelihood of tangible progress against the possibility of new setbacks. Market participants are paying keen attention to pronouncements from both parties, especially Iran’s remarks concerning the Strait of Hormuz, alongside the real-time movements of tankers in this critical maritime corridor. In a notable development within the region, Lebanon declared a partial ceasefire between Hezbollah and Israel on Monday. The action is perceived as a modest measure aimed at alleviating tensions in a conflict that has played a role in the broader confrontation with Iran. Analysts observed that even with a formal ceasefire agreement, it may require several months for shipping activity through the Strait of Hormuz to return to normal levels. Any damage to energy infrastructure may necessitate an extended duration before operations can resume at full capacity.

Last month, Saudi Aramco Chief Executive Officer Amin Nasser cautioned that interruptions in the Strait of Hormuz might delay the stabilisation of global oil markets until 2027. He stated that extended disruptions could impact almost 100 million barrels of oil supply on a weekly basis. Saudi Aramco holds the position as the largest oil producer globally. Morgan Stanley characterised the present oil market as being in “a race against time,” cautioning that the elements which have thus far hindered a more pronounced increase in crude prices may start to diminish if the Strait of Hormuz remains closed through June. According to the broking, increased U.S. crude exports and diminished demand from China have mitigated some of the impacts of the supply shock. However, it warned that an extended closure of the strait could further constrict global supplies if disruptions continue beyond the capacity of the U.S. and China to compensate.