• Oil prices rose as Iran denied diplomatic talks with the US and reports suggested strikes on energy infrastructure.
• Supply disruption concerns around the Strait of Hormuz kept markets volatile after Monday’s sharp decline.
• Analysts warn Brent could move toward $110 in the near term and potentially breach $150 if disruptions persist through April.
Crude Rebounds Sharply Amid Iran Strike Reports; $150 Oil Risk Back on Table
Oil markets volatile amid conflicting signals on US-Iran diplomacy and fresh strike reports
Summary
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Crude oil prices inched up in early trade on Tuesday as fears of supply disruptions resurfaced after Iran denied engaging in diplomatic talks with the US to end the ongoing conflict in West Asia. At 0940 IST, benchmark Brent crude was trading above $100 per barrel, while West Texas Intermediate (WTI) crude futures were up 1.6% at $89.44 per barrel in early Asian trade.
In a post on Truth Social, US President Donald Trump said the US and Iran had engaged in “very good and productive conversations” aimed at a complete resolution of hostilities, adding that all planned strikes on power plants and energy infrastructure would be halted for five days.
However, a semi-official Iranian news agency affiliated with the country’s paramilitary Revolutionary Guard reported early Tuesday that two energy facilities had been hit by airstrikes. Analysts and experts had earlier suggested that the US had strategically avoided targeting Iran’s oil infrastructure during the conflict so as not to trigger a surge in global crude prices toward $150 per barrel, which could potentially lead to a global recession.
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The reported strike on energy facilities likely signals an escalation in tensions between the two countries. The report also contradicts Trump’s claim of extending his deadline for Tehran to halt its attacks.
The global crude oil market has remained extremely volatile since the escalation of the war on February 28. Brent and WTI crude hit multi-year highs shortly after the conflict began, before declining nearly 10% on Monday, followed by a rebound.
Despite Trump’s announcement of a pause in attacks, concerns over supply disruptions through the Strait of Hormuz continue to keep global markets and investors jittery. Following the combined military attack, Tehran shut down the Strait of Hormuz — a vital waterway for global trade that accounts for nearly 40% of global oil shipments.
According to a Reuters report citing brokerage firm Macquarie, if tensions persist, crude prices could range between $85 and $90 per barrel in the near term, gradually inching toward $110 until de-escalation occurs and transit through the Strait of Hormuz resumes. The note added that if disruptions continue through April, Brent could even breach $150 per barrel.
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