- Israel and Iran agreed to halt attacks, easing fears of wider conflict and oil supply disruption
- Brent crude held near $94 a barrel, and WTI stayed above $91 amid ceasefire announcements
- The Strait of Hormuz remains closed due to blockades by Iran and the US, limiting oil transit
Oil prices dipped on Tuesday after Israel and Iran agreed to halt attacks against each other, reducing fears of a broader escalation that could have further disrupted global energy supplies. Brent crude traded near $92.95 a barrel after ending the previous session marginally higher, while US benchmark West Texas Intermediate hovered above $91 a barrel.
The move came after Israeli Prime Minister Benjamin Netanyahu said Israel would refrain from further military action against Iran unless Tehran launched fresh attacks. Iranian media reports indicated a similar willingness to maintain the ceasefire, offering markets a degree of reassurance after days of heightened tensions.
The latest flare-up had threatened wider diplomatic efforts to end the conflict in the Middle East, prompting US President Donald Trump to publicly urge restraint and de-escalation.
While the ceasefire has helped cool immediate supply concerns, energy markets remain far from normal. The Strait of Hormuz — one of the world's most critical oil transit routes — remains effectively closed under competing blockades maintained by Iran and the US, limiting the movement of crude oil, refined fuels and natural gas.
Fresh security incidents also highlighted the fragile nature of the truce. US Central Command said an empty oil tanker in the Gulf of Oman was disabled after allegedly attempting to violate the blockade and sail to an Iranian port. Separately, Israel's military said it intercepted a “suspicious aerial target” originating from Yemen.
Trump said late Monday that negotiations with Tehran were continuing and reiterated his view that oil prices would decline once the conflict ends.
However, analysts caution that even a formal peace agreement would not immediately restore energy flows. Mines in the Strait of Hormuz would need to be cleared, damaged energy infrastructure repaired and oil fields brought back online, a process that could take months.
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