Global oil markets climbed sharply on Tuesday afternoon in Asia as traders braced for a high-stakes US deadline for Iran to reopen the strategic Strait of Hormuz.
Brent crude, the international benchmark, rose approximately 1.4% to $111.33 per barrel, while US-traded West Texas Intermediate crude jumped 2.8% to $115.61.
The price rally came hours before a deadline set by US President Donald Trump, who has warned that Iran must agree to a deal by 20:00 Washington DC time (00:00 GMT Wednesday) or face severe consequences. On Monday, Trump threatened to “take out Iran in one night” if negotiations fail.
Shipping Disruptions
Oil and gas shipments through the Strait of Hormuz—a narrow waterway through which roughly one-fifth of the world’s petroleum passes—have been severely disrupted. Tehran has threatened to attack vessels using the strait in retaliation for US and Israeli airstrikes that began on 28 February.
Speaking at the White House, Trump said he believed “reasonable” leaders in Iran were negotiating in “good faith,” but acknowledged the outcome remained uncertain.
Iran has so far rejected proposals for a temporary ceasefire, instead demanding a permanent end to hostilities and the lifting of all sanctions against the country.
Market Analysis
Ye Lin, an analyst at research firm Rystad Energy, said the rising prices suggest investors believe a US deal may be more difficult than expected due to Iran’s hardline stance.
“The war could be drawn out,” she said, adding that traders are also trying to determine whether Trump genuinely wants a deal or is “just putting up a smokescreen while preparing for a larger attack.”
Global Impact
The disruption has pushed up energy prices worldwide and raised concerns about higher global inflation. Major Asian economies, including Japan and South Korea, have been particularly hard hit due to their heavy reliance on Middle Eastern energy imports.
While some vessels have navigated the strait in recent weeks, shipping volumes remain far below pre-conflict levels.
Trump has called on countries to send warships to the region to help secure safe passage through the waterway. Several nations have separately negotiated with Iran to obtain safe passage for their own ships.
