Crude oil prices moved higher on Tuesday as geopolitical tensions in the Middle East escalated following fresh US military strikes on Iranian targets near the Strait of Hormuz.
Markets remained volatile as traders balanced supply disruption concerns against growing optimism surrounding diplomatic negotiations between the United States and Iran aimed at ending the prolonged conflict.
Brent crude futures for August 2026 rose nearly 2% to trade at US$95.45 per barrel during early trade, while US West Texas Intermediate (WTI) crude futures for July 2026 climbed 1.84% to US$91.97 per barrel.
Brent crude touched an intraday high of US$95.56, while WTI crude traded as high as US$92.03 during the session.
Investor sentiment turned cautious after the US Central Command confirmed strikes on targets in southern Iran, including missile launch sites and boats allegedly attempting to lay mines.
The US described the strikes as defensive measures intended to protect American forces from threats posed by Iranian military activity in the region.
Iranian media reported explosions in Bandar Abbas and nearby coastal regions along the strategically important Strait of Hormuz, a key global energy shipping route.
The conflict has significantly disrupted maritime movement, with Tehran reportedly restricting nearly all non-Iranian shipping through the Gulf since the war began.
The Strait of Hormuz continues to remain at the centre of global energy market concerns as nearly one-fifth of the world’s oil and gas flows pass through the region.
Supply fears have driven crude oil prices sharply higher in recent months, with prices reportedly rising more than 50% since the conflict escalated.
Ship-tracking data showed gradual improvement in shipping activity, with liquefied natural gas tankers recently travelling through the strait towards Pakistan, China and India.
A supertanker carrying Iraqi crude oil to China also reportedly resumed its journey after being stranded for nearly three months.
Diplomatic negotiations between the United States and Iran continued in Doha, where Iranian officials held discussions with Qatar’s prime minister regarding a possible agreement to halt the conflict.
Both Washington and Tehran indicated progress towards a memorandum of understanding that could pause hostilities and provide negotiators with a 60-day window to finalise a broader agreement.
Reports also suggested that Iran may remove mines from the Strait of Hormuz within 30 days under a potential agreement, allowing commercial shipping routes to reopen fully.
Market participants viewed these developments positively, although uncertainty regarding the final outcome continued to keep traders cautious.
Analysts stated that oil markets remain highly sensitive to both military developments and diplomatic progress in the region.
While hopes of a breakthrough in negotiations supported sentiment, concerns remained that the agreement could still collapse, potentially triggering renewed supply disruptions and further volatility in crude oil prices.
US President Donald Trump also reiterated demands for Iran to surrender its enriched uranium stockpile, adding another layer of uncertainty to the negotiations.
Crude oil prices are expected to remain volatile as geopolitical tensions, military developments and diplomatic negotiations continue to shape market sentiment. Investors will closely monitor developments surrounding the Strait of Hormuz and the ongoing US-Iran discussions for further direction in global energy markets.
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Published on: May 26, 2026, 7:57 AM IST
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