Crude Oil Hits $105 Amidst Tension as Trump Declares Peace Talks on ‘Life Support’—Expert Reactions Inside.

Oil prices continued their upward trajectory on Tuesday, marking a two-day increase driven by ongoing uncertainties surrounding the U.S.-Iran conflict. Recent statements from President Donald Trump indicated that the ceasefire with Iran is precariously positioned, hindered by key disagreements, particularly relating to military hostilities, sanctions, and the resumption of Iranian oil exports. As Brent crude futures rose to $104.51 per barrel and West Texas Intermediate increased to $98.38, market dynamics remain heavily influenced by geopolitical tensions that could exacerbate supply concerns in the near term.

In response to the fluctuating oil market, the Trump administration announced a release of 53.3 million barrels from the U.S. Strategic Petroleum Reserve, aimed at stabilizing prices for refiners and suppliers. With experts also focusing on Trump’s upcoming visit to China, there is cautious optimism that the U.S. might leverage Beijing’s influence over Iran to facilitate a more comprehensive ceasefire. However, reports of UAE military strikes within Iran, including an attack on oil infrastructure, further complicate the scenario, suggesting that regional tensions may persist and lead to increased volatility in oil pricing.

Analysis from Morgan Stanley highlights a critical juncture for the global oil market, noting that if the Strait of Hormuz remains closed into June, supply dynamics could drastically tighten. Although the market has maintained a buffer against a significant spike in prices thus far, sustained disruptions could push prices between $110 and $150 per barrel. The firm warns that with nearly 20 million barrels per day potentially impacted, the consequences of a prolonged standoff could delay market stability for years, as indicated by Saudi Aramco’s forecasts. Therefore, market participants should remain vigilant as geopolitical events unfold, anticipating potential escalations that could have lasting impacts on global oil supply and pricing.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)