Oil prices edged higher in early Asian trading on Tuesday as fragile negotiations between the United States and Iran over ending hostilities continued to fuel concerns about global supply disruptions.
Brent crude futures rose 30 cents, or 0.29%, to $104.51 per barrel, while US West Texas Intermediate (WTI) gained 31 cents, or 0.32%, to $98.38 as of 0002 GMT. Both benchmarks had climbed nearly 2.8% in the previous session.
The market reaction comes amid uncertainty over diplomatic efforts to stabilise the conflict, with US President Donald Trump stating on Monday that the ceasefire with Iran was “on life support.” He cited unresolved disputes over key issues including a full cessation of hostilities, the lifting of restrictions on Iran’s oil exports, removal of the US naval blockade, and compensation for war-related damages.
Iran, meanwhile, has maintained its position on sovereignty over the Strait of Hormuz, a critical chokepoint through which nearly one-fifth of global oil and liquefied natural gas flows.
Market analysts warned that continued uncertainty could sustain elevated prices. “As long as negotiations remain inconclusive and flows through the Strait of Hormuz stay restricted, we should see prices holding above $100,” said Tim Waterer, chief market analyst at KCM Trade.
He added that a breakthrough agreement could trigger a sharp correction of $8–12 per barrel, while further escalation or renewed blockade risks could push Brent above $115.
Supply-side concerns have been reinforced by production and export disruptions linked to regional tensions. A Reuters survey indicated that OPEC output in April fell to its lowest level in more than two decades. Saudi Aramco CEO Amin Nasser also warned that instability in the Strait of Hormuz could delay a return to oil market stability until at least 2027, citing potential losses of around 100 million barrels per week.
In parallel, the US administration announced plans to release 53.3 million barrels of crude from the Strategic Petroleum Reserve (SPR) in an effort to stabilise markets. Ship-tracking data also showed SPR crude shipments en route to Turkey, marking the first such delivery to the Mediterranean country.
On the diplomatic and geopolitical front, Washington imposed new sanctions targeting three individuals and nine companies linked to Iranian oil shipments to China, including entities based in Hong Kong, the United Arab Emirates, and Oman.
Separately, a Wall Street Journal report alleged that the United Arab Emirates conducted undisclosed military strikes on Iranian facilities, including a refinery on Lavan Island in early April. The UAE has not publicly confirmed the report.