25/03/2026 03:29 AST
Oil rose on Tuesday on supply fears, as Iran denied it had talks with the United States to end the war in the Gulf, contradicting US President Donald Trump who said a deal could be reached soon.
Crude futures had dropped more than 10 percent on Monday, after Trump ordered a five-day delay to attacks on Iran's power plants, saying the US had talks with unnamed Iranian officials that produced "major points of agreement."
Brent futures rose $1.25, or 1.3 percent, to $101.19 a barrel at 11:58 a.m. Saudi time. US West Texas Intermediate climbed $2.15, or 2.4 percent, to $90.28.
The war has all but halted shipments of about one-fifth of the world's oil and liquefied natural gas through the Strait of Hormuz, causing what the International Energy Agency has called the biggest-ever oil supply disruption. However, two tankers bound for India sailed through the strait on Monday.
"By shelving the plan to strike Iranian power plants for five days, the US effectively sucked ?much of the 'war premium' from the oil price," said KCM Trade chief market analyst Tim Waterer.
Iran on Tuesday sent waves of missiles into Israel. Tehran has dismissed Trump's talk of negotiations as 'fake news.'
"Today's moderate bounce is ?just the market finding its footing in the mud. Traders are aware that while the missiles are on hold, the Strait ?of Hormuz is still far from a clear waterway."
Tehran rejected the claim of contact ?with Washington, dismissing it as an attempt to manipulate financial markets, while Iran's Revolutionary Guards said they had attacked US ?targets and denounced Trump's comments as "worn-out psychological operations."
"Even with a possible decrease in tensions after (Monday's) announcement from President Trump, we expect a ?price floor ?of $85-$90 and a natural drift back to the $110 range until the Strait of Hormuz is restored," Macquarie said in a client note.
If the strait remains effectively shut until the end of April, Brent could still reach $150 a barrel, Macquarie said.
In the latest attacks on energy infrastructure across the region, a gas company office and a pressure-reduction station were hit in the Iranian city of Isfahan, while a projectile struck a gas pipeline feeding a power station in Khorramshahr, Iran's Fars news agency reported.
To ease supply shortage, the US temporarily waived sanctions on Russian and Iranian oil already at sea. Industry sources said ?traders have since offered Iranian crude to Indian refiners at a premium to ICE Brent.
The ?International Energy Agency ?Executive Director Fatih Birol on Monday said the agency is consulting Asian and European governments on possible further releases of strategic reserves "if necessary."
Still, markets are bracing for market disruption at least until April, which continue to be a tailwind beneath Brent while maintaining ?momentum for ?inflation, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
Oil executives ?and energy ministers at a conference in Houston flagged the longer-term impact of the US-Israel war with Iran on the global economy. US Energy Secretary Chris ?Wright downplayed the crisis.
Reuters
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