Global Oil Prices Reboud as Skepticism Over US-Iran Truce Details and Strait of Hormuz Clearance Spurs Supply Fears
Global crude benchmarks edged higher on Tuesday as initial market optimism over a preliminary US-Iran peace agreement faded. With the full text of the memorandum of understanding undisclosed and significant technical and security hurdles remaining before the blocked Strait of Hormuz can safely reopen, investors adopted a cautious stance, driving Brent and WTI crude futures up by 0.3%.
International oil prices reversed their downward trend on Tuesday, charting a moderate recovery as energy markets sought clarity on the preliminary peace framework between the United States, Israel, and Iran. Brent crude futures rose by 26 cents, or 0.3%, to settle at $83.42 per barrel, while US West Texas Intermediate (WTI) increased by 46 cents, or 0.3%, to $81.12 per barrel. This price rebound followed a massive 5% plunge on Monday—which had sent prices to their lowest levels since early March—triggered by US President Donald Trump’s announcement that a memorandum of understanding (MoU) had been signed to halt hostilities. The conflict had completely sealed off the Strait of Hormuz, a critical maritime chokepoint responsible for translating 20% of global oil shipments, effectively halting approximately 14 million barrels of daily crude production. The initial market euphoria quickly gave way to skepticism as investors realized the full text of the MoU remains undisclosed and a permanent peace treaty has yet to be finalized. While preliminary indicators suggest a 60-day ceasefire to negotiate complex issues, including Iran's nuclear ambitions, both market analysts and political leaders are preaching caution. Iranian President Masoud Pezeshkian validated the memorandum as a vital stepping stone but explicitly clarified that a lasting settlement is still under development. Industry experts note that even with a diplomatic breakthrough, restoring the pre-war flow of oil will face severe logistical bottlenecks. Maritime analysts emphasize that de-mining the Gulf shipping lanes, securing comprehensive maritime insurance coverage, and bringing damaged infrastructure and offline oil wells back into operation will require substantial time, keeping the energy market in a strategic "wait-and-see" pattern.