Global oil prices rebounded sharply on Tuesday, climbing back above $100 a barrel, following conflicting statements from Washington and Tehran regarding the possibility of direct negotiations to de-escalate the ongoing conflict.
Brent crude, the international benchmark, rose by 4% to trade at $103.94 a barrel in Asian trading, while Nymex Light Sweet crude increased by 4.1% to $91.75. The surge came a day after the market experienced a dramatic plunge of more than 10%, triggered by comments from US President Donald Trump suggesting a potential breakthrough in tensions.
On Monday, President Trump announced he was delaying threatened strikes on Iranian power plants, stating that Washington had engaged in “productive” conversations with Tehran and was pursuing a “COMPLETE AND TOTAL” resolution to the crisis. The remarks led to a sharp sell-off in oil prices and a rally in global stock markets.
However, the optimism was quickly met with denial from Iran. Tehran rejected claims of any contact with the United States, dismissing the reports as an attempt to manipulate global energy markets.
The conflicting narratives have injected fresh volatility into a market already reeling from weeks of conflict. The war began on 28 February, following US and Israeli strikes on Iran. In response, Iran has effectively blocked the Strait of Hormuz, a critical chokepoint through which approximately 20% of the world’s oil and liquefied natural gas typically transits.
The stalemate has sent global fuel prices soaring and prompted international efforts to mitigate supply disruptions. The US has implemented temporary waivers on sanctions for Russian and Iranian oil already at sea to ease shortages, while China has moved to reduce planned fuel price hikes to lessen the burden on domestic consumers.
President Trump’s initial threat on Saturday to “obliterate” Iranian power plants if the Strait of Hormuz was not reopened within 48 hours had previously sent Brent crude spiking to $113 a barrel.
Despite the renewed uncertainty in the oil market, Asian stock markets showed signs of relative stability on Tuesday after steep losses on Monday. Japan’s Nikkei 225 was up 0.8%, Hong Kong’s Hang Seng Index gained 1.6%, and South Korea’s Kospi rose by 2.2%. The region’s markets are particularly sensitive to fluctuations in energy prices due to their heavy reliance on oil and gas imports that transit through the Strait of Hormuz.
