Oil prices rose to $105 a barrel on Tuesday as negotiations between Washington and Tehran stalled. Despite the uncertainty surrounding the ten-week conflict, markets remained largely muted. The initial optimism surrounding a U.S. proposal to ease tensions dissipated after President Donald Trump dismissed Iran’s counter-offer as “garbage” during a press briefing on Monday. Trump warned that Tehran’s rejection left the already fragile cease-fire “unbelievably weak,” raising concerns about the potential near-closure of the Strait of Hormuz to oil tankers.
During Asian trading hours, the benchmark Brent crude increased by 1% to $105.30 per barrel, while U.S. West Texas Intermediate (WTI) also climbed by 1% to $99.18. Precious metals followed suit, with silver surging more than 8% to $87 an ounce after weeks of steady appreciation. Despite these movements in the energy markets, overall sentiment remained cautious. Analyst Rodrigo Catril, speaking on the NAB Morning Call podcast, noted, “For now, President Trump is still talking about the idea that the cease-fire is on a ‘massive life support.’” He added that while Trump is dissatisfied with the current offers, he is not suggesting an imminent escalation.
U.S. equities posted modest gains on Monday, driven by enthusiasm for artificial intelligence stocks, which helped offset concerns about rising oil prices. South Korea’s tech-heavy Kospi rose by 1% in early trading but later relinquished its gains. Analysts caution that oil prices could surge sharply if the conflict extends into June and the bottleneck at Hormuz continues. Stephen Innes of SPI Asset Management remarked, “Beneath the surface calm sits a market increasingly dependent on the assumption that the Strait of Hormuz will gradually reopen sometime before late June.” He warned that an extended disruption would likely force oil prices significantly higher, tighten global financial conditions, and inflict more serious economic damage than markets currently anticipate.
Traders also monitored developments in Japan, where U.S. Treasury Secretary Scott Bessent arrived on Monday to discuss currency issues, as reported by the Nikkei. His visit precedes President Trump’s trip to China later this week, where senior executives, including Tesla’s Elon Musk and Apple’s Tim Cook, will join the president to advance trade talks. Iran’s conflict with the United States is expected to be a key agenda item, with Trump likely to urge Chinese President Xi Jinping, a major buyer of Iranian oil, to assist in resolving the crisis.
Key figures around 0245 GMT indicated that Brent was up 1% at $105.30, WTI was up 1% at $99.18, the Nikkei 225 was up 0.6% at 62,805, and the Hang Seng was up 0.2% at 26,466, while Shanghai’s composite fell 0.2% to 4,217. The euro slipped to $1.1761 from $1.1775, the pound decreased to $1.3589 from $1.3628, and the yen rose to 157.63 per dollar. The oil rally highlights the volatility of global energy markets amid stalled U.S.–Iran negotiations, while broader equities trade cautiously, awaiting potential diplomatic breakthroughs before the conflict escalates further.
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