Oil Prices Climb Amid Concerns Over Global Supply Amid Iran's Denial of US Diplomatic Talks

Global Oil Prices Rise Amid Supply Fears

Brent Futures rose $1.06, or 1.1%, to $101 a barrel at 0001 GMT on Tuesday, while U.S. West Texas Intermediate (WTI) climbed $1.58, or 1.8%, to $89.71. The moderate bounce in oil prices comes after a sharp decline on Monday, following President Donald Trump's announcement of a five-day delay to attacks on Iran's power plants.

Crude Futures dropped more than 10% on Monday after Trump's announcement, which led to a significant reduction in the "war premium" from the oil price, according to Tim Waterer, chief market analyst at KCM Trade. Despite the moderate bounce in prices, traders remain cautious, aware that the Strait of Hormuz is still a volatile and uncertain waterway.

The ongoing conflict has halted shipments of about one-fifth of the world's oil and liquefied natural gas through the Strait of Hormuz. However, two tankers bound for India sailed through the strait on Monday. Iran has rejected claims of contact with Washington, dismissing them as an attempt to manipulate financial markets.

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Macquarie expects a price floor of $85-$90 and a natural drift back to the $110 range until the Strait of Hormuz is restored. The firm also warns that if the strait remains effectively shut until the end of April, Brent could reach $150 per barrel. Fighting has damaged energy infrastructure across the region, with recent attacks hitting a gas company office, a pressure-reduction station, and a gas pipeline.

The United States has temporarily waived sanctions on Russian and Iranian oil already at sea to ease shortages. Industry sources report that traders have offered Iranian crude to Indian refiners at a premium to ICE Brent following Washington's move. The International Energy Agency is consulting with Asian and European governments on possible further releases of strategic reserves "if necessary".