Oil prices held steady on Tuesday as investors navigated a fragile mix of geopolitical signals and supply risks. Markets reacted cautiously to indications that the US may move toward de-escalation in its conflict with Iran, even as disruptions to critical oil routes continued to threaten global supply.
The uncertainty kept crude prices volatile through the session, reflecting a market driven largely by political developments rather than demand fundamentals.
Brent crude for May delivery rose marginally to $112.96 per barrel after earlier losses, while the more active June contract traded near $107. US West Texas Intermediate (WTI) slipped to $102.63 per barrel after touching a three-week high earlier in the session.
A report by The Wall Street Journal told US President Donald Trump has told aides he is open to halting military operations against Iran, even if the Strait of Hormuz remains largely closed for now. However, Trump also warned that the US would ‘obliterate’ Iran’s energy infrastructure if Tehran fails to reopen the route.
The Strait of Hormuz handles nearly one-fifth of global oil supply, making it a vital artery for energy markets. Iran’s effective closure of the route has already pushed crude prices sharply higher and raised fears of prolonged disruption.
Tensions escalated further after reports that a fully loaded crude tanker was hit near Dubai. At the same time, missile strikes by Yemen’s Iran-backed Houthi forces near the Bab el-Mandeb Strait have intensified concerns over disruptions to key trade routes connecting Asia and Europe.
Brent crude has increased approximately 59% during March, which represents its highest monthly increase ever. The price of WTI has risen by approximately 58% because of geopolitical uncertainties and supply chain issues, which represent its most significant price increase since May 2020.
Analysts expect oil prices to remain volatile amid ongoing geopolitical risks that continue to dominate market sentiment. ‘The market remains firmly geopolitics-driven, with supply disruptions and policy responses shaping price movement,’ said Sugandha Sachdeva of SS WealthStreet.
Experts say crude could retest $120 per barrel, with further upside possible if tensions escalate. A sustained de-escalation, however, could stabilize prices in the near term.