Crude oil prices traded near recent highs on Tuesday as investors closely monitored developments in negotiations between the United States and Iran.
Market participants remained cautious amid conflicting signals regarding ceasefire discussions and the potential reopening of the strategically important Strait of Hormuz.
Although both major crude benchmarks eased slightly during early trading, prices retained most of the gains recorded in the previous session, reflecting continued concerns about supply disruptions and geopolitical tensions in the Middle East.
Brent crude futures for August 2026 delivery were trading at US$94.34 per barrel, down US$1.10 or 1.15%, after moving within a day's range of US$94.34 to US$95.83.
Meanwhile, WTI crude futures for July 2026 delivery were trading at US$91.57 per barrel, down US$0.59 or 0.64%, with prices fluctuating between US$91.51 and US$92.64 during the session.
Despite the modest pullback, both benchmarks continue to trade significantly above levels seen earlier this year as geopolitical risks remain a dominant market driver.
Oil markets remain highly sensitive to developments in discussions between Washington and Tehran.
US President Donald Trump stated that negotiations with Iran were continuing, while reports from Iran suggested that indirect talks with the United States had been suspended.
The mixed messaging has created uncertainty among investors, who are attempting to assess whether diplomatic progress can be achieved in the coming days.
President Trump later indicated that he expected an agreement extending the ceasefire and facilitating the reopening of the Strait of Hormuz within the next week.
The outcome of these negotiations is expected to play a crucial role in determining whether the current geopolitical risk premium remains embedded in oil prices or gradually fades.
Read More: Wipro Fixes June 5 as Record Date for ₹15,000 Crore Share Buyback!
The Strait of Hormuz remains one of the most critical energy transit routes globally, handling a substantial share of international oil and liquefied natural gas shipments.
Since the outbreak of hostilities, Iran has effectively restricted most non-Iranian shipping movements through the Gulf region, disrupting approximately one-fifth of global oil and LNG flows. These supply concerns have been a major factor behind the sharp rise in crude oil prices in recent weeks.
Shipping industry executives have emphasised that any future agreement between the United States and Iran must provide clear operational guidelines before normal shipping activity can resume through the waterway.
Additional geopolitical developments have contributed to ongoing market volatility. Lebanon announced a partial ceasefire between Hezbollah and Israel, representing a limited easing of tensions within the broader regional conflict.
However, investors remain cautious as headlines from the Middle East continue to emerge rapidly, creating uncertainty regarding the broader security environment and its potential impact on energy supplies.
Rising oil prices and supply concerns have increased demand for US crude exports from refiners in both Asia and Europe.
US crude exports reached a record 5.6 million barrels per day in May, highlighting the growing importance of American supply in balancing global energy markets during the ongoing geopolitical crisis.
Market participants are also awaiting fresh inventory data from the United States. According to preliminary industry estimates, US crude stockpiles are expected to have declined by approximately 3.6 million barrels during the week ended 29 May.
Gasoline and distillate inventories are also projected to have fallen, which could further support oil prices if official data confirms tighter supply conditions.
Crude oil prices remain supported by uncertainty surrounding US-Iran negotiations, ongoing concerns about shipping through the Strait of Hormuz and persistent geopolitical risks across the Middle East. While hopes of diplomatic progress have limited further gains, traders are likely to remain highly sensitive to developments in ceasefire talks, shipping activity and inventory data. Until greater clarity emerges, volatility is expected to remain a defining feature of the oil market.
Track the stock market in Hindi. Visit Angel One News for the latest market trends, insights, and share market news in Hindi.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jun 2, 2026, 8:37 AM IST
Team Angel One
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
EN