Oil prices rebounded as Iran denied US talks, contradicting Trump, with analysts warning of prolonged supply risks if the Strait of Hormuz remains closed.
OIL prices rose in early trading on Tuesday as markets assessed ongoing supply risks. The increase followed Iran’s denial of holding talks with the United States to end the Gulf war, directly contradicting statements from President Donald Trump.
Brent crude futures climbed USD 1.06, or 1.1%, to USD 101 a barrel. US West Texas Intermediate crude rose USD 1.58, or 1.8%, to USD 89.71.
This moderate bounce followed a steep drop of more than 10% on Monday. The earlier sell-off was triggered by Trump announcing a five-day delay to threatened attacks on Iran’s power plants.
Trump had claimed the US held productive talks with Iranian officials, resulting in “major points of agreement”. “By shelving the plan to strike Iranian power plants for five days, the US effectively sucked much of the ‘war premium’ from the oil price,” said Tim Waterer, chief market analyst at KCM Trade.
Iran’s government firmly rejected any claims of contact with Washington. Tehran dismissed the statements as an attempt to manipulate financial markets.
Iran’s Revolutionary Guards said they had launched new attacks on US targets. They denounced Trump’s comments as “worn-out psychological operations”.
The conflict has severely disrupted shipments through the critical Strait of Hormuz. Approximately one-fifth of the world’s oil and liquefied natural gas typically passes through this waterway.
Two tankers bound for India managed to sail through the strait on Monday. However, the overall shipping situation remains far from normal.
“Today’s moderate bounce is just the market finding its footing in the mud,” Waterer added. “Traders are aware that while the missiles are on hold, the Strait of Hormuz is still far from a clear waterway.”
Analysts at Macquarie provided a detailed price outlook in a research note. They expect a price floor of USD 85–90 for Brent crude with a natural drift back toward USD 110.
This forecast assumes the Strait of Hormuz is not fully restored. The bank warned Brent could still reach USD 150 per barrel if the strait remains effectively shut until the end of April.
Fighting has caused significant damage to energy infrastructure across the region. Recent attacks hit a gas company office and a pressure station in Isfahan, Iran.
A projectile also struck a gas pipeline feeding a power station in Khorramshahr. The Iranian semi-official Fars news agency reported these incidents.
To ease global shortages, the US has temporarily waived sanctions on Russian and Iranian oil already at sea. Industry sources said this has led traders to offer Iranian crude to Indian refiners at a premium to ICE Brent.
The International Energy Agency is consulting governments on possible further releases of strategic reserves. Executive Director Fatih Birol said this would happen “if necessary”.
Oil executives and energy ministers warned of the war’s longer-term impact on the global economy. These warnings came during a conference in Houston, though US Energy Secretary Chris Wright downplayed the crisis.
