LONDON — Oil prices climbed sharply on Tuesday as uncertainty persisted over a fragile ceasefire between the United States and Iran, with traders citing risks to oil shipments through the Strait of Hormuz, industry sources said.
Brent crude futures rose more than 2% in early trading before settling around $104 per barrel, while U.S. West Texas Intermediate gained a similar amount to trade near $98, according to market data. The increases followed comments from U.S. President Donald Trump describing the ceasefire as “on life support” after Iran’s response to a U.S. peace proposal was deemed unacceptable.
The escalation in rhetoric came amid ongoing tensions in the region that have disrupted shipping through the Strait of Hormuz, a critical chokepoint for global oil supplies. The waterway has seen reduced tanker traffic since earlier disruptions linked to the conflict.
“Details remain unclear on the next steps in negotiations,” a senior energy analyst with a major trading house said on condition of anonymity. Market participants are closely watching diplomatic efforts, including potential involvement from China, a key buyer of Iranian crude.
The conflict, which began earlier in 2026, has already led to significant volatility in energy markets. Oil prices have more than doubled from pre-conflict levels around $70 per barrel earlier in the year, driven by supply concerns and attacks on infrastructure, according to industry reports. The International Energy Agency and other monitors have noted the potential for prolonged disruptions if shipping lanes remain affected.
Major producers and consumers, including the Organization of the Petroleum Exporting Countries and allies, have not announced immediate production adjustments. U.S. officials have pointed to domestic output and strategic reserves as buffers, though analysts caution that sustained closure of key routes could tighten global supplies further.
Iran has accused the U.S. of ceasefire violations, while Washington has rejected recent Iranian proposals. Both sides have expressed interest in de-escalation, but no breakthrough has been reported as of May 13.
As of Tuesday, monitoring of tanker movements continued, with several vessels reported to have turned off tracking systems while transiting the area. Energy ministries in Gulf states and European governments have said they are assessing impacts on global supply chains.
Trading houses and analysts expect prices to remain elevated in the near term, with further movements dependent on diplomatic developments and any resumption of fuller oil flows through the Strait of Hormuz. Officials from involved parties have not provided a timeline for resolution.
