Oil prices stayed unpredictable on Tuesday because of mixed messages about U.S.–Iran ceasefire talks and uncertainty over the Strait of Hormuz. This left traders feeling uneasy.
Brent crude futures rose by 6 cents to $95.04 a barrel in early trading, while U.S. West Texas Intermediate fell 17 cents to $91.99. Both prices had jumped over 5% the day before, but those gains faded after President Donald Trump said talks with Iran were still happening, even though Tehran’s Tasnim news agency reported the talks had stopped.
The situation became more confusing when Trump told CNBC he “did not mind” if the talks failed, but later posted on social media that discussions were still going.
He also told ABC News he expected a deal to extend the ceasefire and reopen the Strait of Hormuz “over the next week.”
Analysts say the market is now focused on whether tankers will start moving through the Strait again and if Tehran’s statements become more intense.
“The status of U.S.–Iran negotiations will ultimately determine whether the current risk premium stays embedded in oil prices or starts to unwind,” noted Tim Waterer, chief market analyst at KCM Trade.
At the same time, Lebanon announced a partial ceasefire between Hezbollah and Israel, which is a small step back from the conflict that has raised tensions in the region.
Still, traders remain cautious. “With headlines continuing to fly out of the Middle East, oil prices are set to remain volatile until clearer evidence of progress towards a peace deal emerges,” said Tony Sycamore of IG.
