Oil prices rose to $105 a barrel on Tuesday as talks between Washington and Tehran stalled, but markets remained largely muted despite the uncertainty surrounding the ten‑week conflict.
The optimism that had briefly surrounded a U.S. proposal to ease tensions evaporated after President Donald Trump dismissed Iran’s counter‑offer as “garbage” in a press briefing on Monday. Trump warned that Tehran’s rejection left the already fragile cease‑fire “unbelievably weak,” heightening concerns over the near‑closure of the Strait of Hormuz to oil tankers.
In Asian trading hours, the benchmark Brent crude increased by 1 % to $105.30 per barrel, while U.S. West Texas Intermediate (WTI) climbed to $99.18, also a 1 % gain. Precious metals followed suit, with silver jumping more than 8 % to $87 an ounce after weeks of steady appreciation.
Despite the moves in energy markets, overall sentiment was cautious. “For now, President Trump is still talking about the idea that the cease‑fire is on a ‘massive life support’,” analyst Rodrigo Catril told the NAB Morning Call podcast, referring to the president’s comments. “The theme for markets is that, as much as Trump is not happy with what is on offer, he is also not suggesting that there will be an escalation.”
U.S. equities posted modest gains on Monday, buoyed by enthusiasm for artificial‑intelligence stocks that offset worries about higher oil prices. South Korea’s tech‑heavy Kospi rose 1 % in early trading before giving back its gains later in the session.
Analysts caution that oil could surge sharply if the conflict extends into June and the Hormuz bottleneck persists. “Beneath the surface calm sits a market increasingly dependent on the assumption that the Strait of Hormuz will gradually reopen sometime before late June,” said Stephen Innes of SPI Asset Management. “An extended disruption would almost certainly force oil prices materially higher, tighten global financial conditions and inflict far more serious economic damage than markets currently price in.”
Traders also watched developments in Japan, where U.S. Treasury Secretary Scott Bessent arrived on Monday to discuss currency issues, according to the Nikkei. His visit precedes President Trump’s trip to China later this week, where senior executives such as Tesla’s Elon Musk and Apple’s Tim Cook will join the president to advance trade talks. Iran’s war with the United States is expected to be a key agenda item, with Trump likely to press Chinese President Xi Jinping, a major buyer of Iranian oil, to help resolve the crisis.
Key figures around 0245 GMT showed Brent up 1 % at $105.30, WTI up 1 % at $99.18, the Nikkei 225 up 0.6 % at 62,805, the Hang Seng 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 to $1.3589 from $1.3628, and the yen rose to 157.63 per dollar.
The oil rally underscores how volatile global energy markets remain amid the stalled U.S.–Iran negotiations, while broader equities trade cautiously, waiting to see whether diplomatic breakthroughs can emerge before the conflict deepens.
