London, May 26, 2026, 11:54 BST
- Brent edged higher after new U.S.-Iran tensions brought buyers back on supply risk.
- WTI was behind after the U.S. Memorial Day holiday on Monday meant there was no official settlement price.
- Traders watch to see if the Strait of Hormuz reopens and how quickly that might happen.
Brent crude neared $100 a barrel again on Tuesday after U.S. airstrikes in southern Iran cut back on peace deal optimism and held up chances for a full Strait of Hormuz reopening. Brent traded 3.6% higher at $99.64 a barrel at 0843 GMT. U.S. West Texas Intermediate was down 3.7% from Friday’s close, sitting at $93.09. There was no WTI settlement on Monday because of Memorial Day in the U.S.
The move is making waves now as the market started to price in supply shock relief. U.S. Secretary of State Marco Rubio said talks with Iran might last “a few days.” U.S. Central Command reported Monday’s strikes targeted boats laying mines and missile launch areas as defensive steps. Reuters
Strait of Hormuz drives the price move. The U.S. Energy Information Administration said in 2024 and the first quarter of 2025, more than a quarter of seaborne oil moved through the route, making up about one-fifth of world oil and petroleum-product demand. LNG is gas cooled for transport by tanker.
Brent bounced back after dropping 7% in the last session as traders bet talks were speeding up. “We are still waiting for more details on a potential deal,” said Giovanni Staunovo at UBS, but noted “flows through the Strait remain restricted.” Ole Hansen at Saxo Bank said any reopening would likely be “gradual,” even if a deal is made. Tony Sycamore at IG warned a deal could “collapse at the 11th hour.” Reuters
LNG tankers are getting through Hormuz again, but traders stayed cautious. Ship-tracking showed three LNG ships made the passage in the past few days. A very large crude carrier loaded with Iraqi Basrah crude is now on its way to China after being stuck for almost three months.
Brent and WTI aren’t trading the same way. Brent is used as the global benchmark, so concerns around Hormuz move it directly. WTI tracks U.S. inland supply and demand, and the usual comparison was skewed Tuesday because there was no Monday settlement.
Physical oil markets have felt the shakeup too. Indian refiners processed 8.9% less crude in April compared to the previous month, dropping to 5.23 million barrels a day. According to Reuters, refiners in India shifted to buying crude from Latin America and Africa after disruptions hit Middle East supplies. India remains the third-largest importer and consumer of oil globally.
Market sentiment remained unsettled. RBC Capital Markets global macro strategist Peter Schaffrik said the Middle East situation was “not entirely clear what’s going on there.” He pointed to how quickly investors shifted from hopes of a deal to concern over renewed bombing. Reuters
Risk is pulling both ways. If a real deal comes together that lets tankers through Hormuz, crude could fall, with the recent sharp rally since the fighting started putting extra pressure on the price. But a new military clash, drawn-out talks or a slow reopening would keep supply tight. That would hit fuel, freight costs and inflation.
IEA: Hormuz bottleneck keeps oil tied to shipping, riskThe International Energy Agency, in its recent Middle East energy-market note, said resuming exports through Hormuz is still the key factor for any relief on energy supply, prices, and the global economy. Oil is behaving less like a normal commodity, still moving on headlines around diplomacy and shipping threats.
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