Crude oil prices advanced in early Asian trade on Tuesday as markets continued to assess geopolitical tensions surrounding the United States and Iran, alongside concerns over potential disruptions to global energy supplies.
Investor sentiment remained cautious after signs emerged that negotiations aimed at ending the conflict between the two nations remained fragile, keeping fears of prolonged supply constraints firmly in focus.
Brent crude futures for July 2026 rose 0.75% to trade at US$105.14 per barrel, while US West Texas Intermediate (WTI) crude futures for June 2026 gained 0.93% to US$98.98 per barrel during early trade.
Both oil benchmarks had already surged nearly 2.8% in the previous trading session amid heightened geopolitical uncertainty.
Oil markets remained supported after US President Donald Trump stated that the ceasefire arrangement with Iran was “on life support”, highlighting major disagreements between the two sides.
Key areas of dispute reportedly include the cessation of hostilities, removal of a US naval blockade, resumption of Iranian oil exports and compensation linked to war-related damages.
Tehran also reiterated its sovereignty over the Strait of Hormuz, a strategically important shipping route that handles nearly one-fifth of global oil and liquefied natural gas flows.
The continued uncertainty surrounding negotiations has increased fears that disruptions to energy supplies from the region could persist for longer than expected.
Market participants are closely monitoring developments around the Strait of Hormuz, as any prolonged disruption could significantly impact global crude oil exports.
Analysts believe oil prices may continue to remain elevated if restrictions to physical oil flows through the strait persist.
According to Tim Waterer, Chief Market Analyst at KCM Trade, oil prices are likely to stay above the US$100 mark as long as negotiations remain inconclusive and transport disruptions continue.
He also noted that a successful peace agreement could trigger a sharp correction in oil prices, while any renewed escalation could push Brent crude prices back towards US$115 per barrel or higher.
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Supply concerns were further amplified after a Reuters survey indicated that OPEC oil production in April declined to its lowest level in more than two decades.
Disruptions linked to the near-closure of the Strait of Hormuz have reportedly forced several producers to curtail exports, tightening global crude supply conditions.
Saudi Aramco Chief Executive Amin Nasser also warned that interruptions to exports through the strait could delay the return of market stability until 2027.
He cautioned that around 100 million barrels of oil per week could be impacted if disruptions continue.
In an effort to stabilise the oil market, the Trump administration announced plans to loan 53.3 million barrels of crude oil from the US Strategic Petroleum Reserve (SPR).
Ship-tracking data showed that a crude shipment from the SPR is currently en route to Turkey, marking the first such delivery to the Mediterranean country.
The move is aimed at easing supply concerns and reducing upward pressure on energy prices.
Adding to geopolitical tensions, the United States imposed sanctions on three individuals and nine companies accused of facilitating Iranian oil shipments to China.
The entities targeted include firms based in Hong Kong, the United Arab Emirates and Oman.
The sanctions were announced just days before a planned meeting between US President Donald Trump and Chinese President Xi Jinping, further intensifying market uncertainty.
Separately, media reports suggested that the United Arab Emirates conducted military strikes on Iran earlier this year, including an attack targeting a refinery on Iran’s Lavan Island.
Although the UAE has not publicly acknowledged the strikes, the reports added to concerns over rising geopolitical instability in the Middle East.
Crude oil prices remain firmly supported by geopolitical tensions, uncertain US-Iran negotiations and concerns surrounding energy supply disruptions through the Strait of Hormuz. While efforts to stabilise oil markets through strategic reserve releases may offer temporary relief, traders are expected to remain highly sensitive to further developments in the Middle East and global supply dynamics.
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Published on: May 12, 2026, 8:21 AM IST
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