Brent crude futures climbed 3.6 per cent or $3.44 to $99.58 per barrel on Tuesday after the US military carried out strikes in Iran, creating a fresh setback to hopes of a resolution, though the US West Texas Intermediate (WTI) crude fell by $2.71 or 2.8 per cent to $93.89 per barrel.
The US and Iran had signalled that they would reach an agreement to end the three-month war that would also reopen shipping through the crucial Strait of Hormuz. However, US forces struck Iranian-linked targets near the waterway while its government simultaneously pursued a ceasefire and shipping negotiations with Iran.
The US Central Command (CENTCOM) said the strikes were designed “to protect our troops from threats posed by Iranian forces.”
The strikes happened as Iran’s top negotiator and its foreign minister were in Doha for talks with Qatar’s prime minister aimed at reaching an agreement.
President Donald Trump had earlier confirmed that negotiations with Iran over an agreement to extend their ceasefire and reopen the strait were “proceeding nicely.”
The American President, in a Truth Social post on Monday, also urged Saudi Arabia, Qatar, and other countries to join the Abraham Accords and recognise Israel. In a later statement, he said Iran’s enriched uranium would either be handed over to the US or, preferably, destroyed in Iran.
Iran said the US had violated a ceasefire after it conducted what it called defensive strikes in southern Iran, while US Secretary of State Marco Rubio said negotiating a deal to halt the conflict could “take a few days.”
Both sides had previously signed a memorandum of understanding that could halt the war and restart shipping through the blockaded, while giving negotiators 60 days to negotiate more complex issues, including Iran’s nuclear programme.
Ship-tracking data showed three Liquefied Natural Gas (LNG) tankers passed through the Strait in recent days, bound for Pakistan, China and India, along with a supertanker carrying Iraqi crude to China that had been stranded for nearly three months.
Traders are trying to play the market on hopes of an agreement and largely ignoring the global energy crunch, with most supply from the Middle East still trapped behind the Strait of Hormuz.
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