Crude oil prices edged higher in early trading on Tuesday as market participants monitored developments in the Middle East following a temporary halt in hostilities between Iran and Israel.
While the ceasefire reduced immediate fears of supply disruptions, investors remained cautious amid uncertainty over whether the truce would hold.
Brent crude futures rose 0.14% to US$94.38 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 0.12% to US$91.41 per barrel during early trading. However, prices later eased, with Brent crude trading at US$93.75, down 0.42%, and WTI crude at US$90.79, lower by 0.56%.
Oil markets initially found support after both Iran and Israel signalled a pause in direct military action following an appeal from U.S. President Donald Trump.
The development eased concerns over an immediate escalation of conflict in one of the world's most important oil-producing regions.
However, investor confidence remained fragile as both nations left open the possibility of renewed hostilities. Iran stated that it could resume military operations if Israel continued attacks against Hezbollah in Lebanon, while Israeli Prime Minister Benjamin Netanyahu warned that Israel would respond forcefully to any future Iranian aggression.
The uncertainty surrounding the ceasefire has kept geopolitical risk premiums embedded in crude oil prices, preventing a significant decline despite the temporary reduction in tensions.
Market analysts noted that investors remain sceptical about the durability of the current truce. Although direct attacks have paused for now, the broader geopolitical environment remains highly volatile.
The conflict has raised concerns over potential disruptions to energy infrastructure and shipping routes, both of which are critical to global oil supply. Traders continue to factor in the possibility that renewed military action could tighten supply conditions and push prices higher.
Recent military developments have reinforced these concerns. U.S. forces reportedly disabled an unladen oil tanker in the Gulf of Oman after it attempted to sail to an Iranian port in violation of the ongoing blockade against Iran.
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One of the most closely watched issues for energy markets is the status of the Strait of Hormuz, a strategically important waterway through which approximately one-fifth of the world's oil supply passes.
Washington has reportedly continued to press Tehran during ongoing diplomatic discussions to ensure the reopening and security of the shipping route.
Any disruption to traffic through the Strait of Hormuz could have significant implications for global energy markets and crude oil prices.
As a result, investors remain highly sensitive to developments surrounding both regional security and diplomatic negotiations.
While the latest ceasefire has reduced immediate fears of a broader conflict, analysts believe the market remains caught between hopes for de-escalation and concerns about renewed tensions.
The next phase of price movement is likely to depend on whether diplomatic efforts lead to a lasting resolution or whether the current pause proves temporary. Any signs of renewed military activity could quickly reignite supply concerns and increase market volatility.
Crude oil prices remain supported by persistent geopolitical uncertainty despite the temporary halt in hostilities between Iran and Israel. With tensions in the Middle East still elevated and the Strait of Hormuz remaining a critical concern for global energy markets, investors are expected to closely monitor diplomatic and military developments for further direction.
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Published on: Jun 9, 2026, 8:42 AM IST
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