Oil prices rose marginally during early Tuesday trading as both Iran and Israeli leadership suggested that a revival of mutual military strikes remains a distinct possibility, despite a temporary pause in direct hostilities brokered by U.S. President Donald Trump. Brent crude futures edged up by 13 cents, or 0.14%, reaching $94.38 per barrel, while U.S. West Texas Intermediate futures gained 11 cents, or 0.12%, to sit at $91.41 per barrel. This slight uptick followed a highly volatile previous session where oil prices surged by up to 5% due to fresh Israeli airstrikes on Iran and operations in Lebanon, which dashed initial expectations of a swift diplomatic breakthrough. Prices later rolled back some of those gains after the Iranian military announced it was concluding its immediate retaliatory operations.
Market analysts emphasize that energy investors remain deeply skeptical about the longevity of the current armistice, choosing to price in ongoing structural uncertainty rather than a permanent diplomatic resolution. The conditional truce was established after President Trump explicitly demanded both nations immediately cease active combat operations. However, Tehran has explicitly warned that it will resume military strikes if Israel continues its campaign against Hezbollah in Lebanon. Echoing this fragile state of affairs, financial experts note that while Washington’s intervention prevented an immediate regional escalation, a comprehensive and lasting peace agreement remains out of reach.
The geopolitical friction was underscored by Israeli Prime Minister Benjamin Netanyahu, who announced via a televised address that Israel would deploy overwhelming force if targeted by another Iranian attack. Concurrently, President Trump revealed in an interview that he had cautioned Netanyahu that the United States might withhold military backing if Israel chose to unilaterally reignite the war with Iran. Analysts point out that the critical variable for global energy markets is whether these immediate de-escalation maneuvers can morph into a sustainable framework or if the market is merely experiencing a brief window of calm.
A central objective for Washington in ongoing negotiations with Tehran is securing the reopening of the strategic Strait of Hormuz, a vital maritime corridor that accommodated nearly 20% of global oil shipments prior to the outbreak of U.S. and Israeli airstrikes on Iran. Illustrating the ongoing maritime enforcement in the region, the U.S. military confirmed that American forces immobilized an unladen oil tanker in the Gulf of Oman after the vessel attempted to breach the active naval blockade and steer toward an Iranian port.
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