Oil prices rise 0.7% as U.S.-Iran peace hopes fade, Strait of Hormuz risks grow and traders assess $100 crude potential through 2027.
Oil prices moved higher Tuesday as fading hopes for a lasting U.S.-Iran ceasefire revived concerns over global energy supplies. Traders are increasingly focused on the risk that prolonged conflict could restrict shipments through the Strait of Hormuz, one of the world’s most important oil transit routes.
Brent and WTI Extend Gains
Brent crude futures rose 62 cents, or 0.7%, to $91.49 a barrel by 0408 GMT. The benchmark had already climbed Monday to its highest level since July 30. U.S. West Texas Intermediate crude gained 75 cents to $85.25 a barrel after briefly reaching $85.37, its strongest level since July 31.
The latest gains reflect renewed geopolitical risk after progress toward a permanent peace agreement stalled. A senior Iranian official said Tehran would adopt a “fully offensive” military posture, while Washington indicated it would not extend the temporary ceasefire.
Market analyst Tim Waterer of KCM said the deteriorating U.S.-Iran relationship was supporting oil prices, particularly because an agreement allowing normal traffic through Hormuz remained elusive. Shipping activity through the waterway has remained extremely limited.
- Brent crude: $91.49 per barrel
- WTI crude: $85.25 per barrel
- Near-term expected range: $80-$100
Hormuz Disruption Keeps Traders Alert
The Strait of Hormuz remains central to the oil market outlook. A projectile struck a vessel leaving the waterway Tuesday, according to tracking data, adding to a series of incidents that have kept daily crossings in the single digits.
Separately, Yemen’s Houthi movement claimed it launched missiles at vessels in the Red Sea, describing one target as a Saudi military ship accompanied by four escorts. Continued attacks across key shipping corridors are increasing the risk premium embedded in crude prices.
Iran is also negotiating with Oman over arrangements for managing Hormuz and has indicated that the discussions are approaching an agreement. However, tensions remain elevated after U.S. President Donald Trump threatened military action against Oman, a longstanding U.S. security partner.
$100 Oil Risk Returns to Focus
The disruption could influence crude prices well beyond the immediate trading session. DBS Bank energy research chief Suvro Sarkar said the absence of a deal could affect oil-price expectations through the fourth quarter and into 2027.
Sarkar expects crude to remain within an $80-$100 range in the near term while uncertainty persists. A sustained disruption to tanker traffic could push prices toward the upper end of that range, while a successful diplomatic breakthrough could reduce the geopolitical premium.
Meanwhile, U.S. crude inventories were expected to decline last week, according to a preliminary Reuters poll. Falling stockpiles could provide additional support for prices if confirmed by official data, leaving oil markets caught between tighter physical supply risks and the possibility of renewed diplomatic progress.
Sources & Methodology
Primary-source standard: Market-moving facts should link to original data releases, regulator notices, company filings or official project announcements whenever available. Secondary reporting is used for additional context, not as a substitute for original evidence.
Page last reviewed: