BY COMFORT OGBONNA
Global oil prices rose sharply on Tuesday as renewed fears about supply disruptions gripped energy markets after Iran denied holding negotiations with the United States to end the ongoing conflict in the Gulf, contradicting comments from Donald Trump suggesting a possible deal could be reached soon.
Benchmark crude prices climbed in early trading as investors reacted to uncertainty surrounding the war and its potential impact on global energy flows. Futures for Brent Crude rose by $4, or roughly 4%, to reach $103.94 per barrel by 0400 GMT. Meanwhile, West Texas Intermediate gained $3.49, also about 4%, to trade at $91.62 per barrel.
The rebound followed a sharp drop in oil prices the previous day. On Monday, crude futures fell by more than 10% after Trump ordered a five-day delay to planned attacks on Iranian power plants, saying that U.S. officials had engaged in discussions with unnamed Iranian representatives and had reached what he described as “major points of agreement.”
However, Tehran quickly rejected the claim that such discussions had taken place. Iranian officials dismissed the statement as misinformation intended to influence global financial and energy markets.
Market analysts said Monday’s sharp decline reflected the sudden removal of what traders often call the “war premium” embedded in oil prices during periods of geopolitical tension.
Tim Waterer, chief market analyst at KCM Trade, said the temporary pause in military action had taken some pressure off prices but had not eliminated the underlying risks facing global energy markets.
He explained that by delaying potential strikes on Iran’s power infrastructure, the United States reduced the immediate threat of escalation, which in turn pulled some of the geopolitical premium out of oil prices. Still, traders remain cautious because the broader conflict remains unresolved.
Waterer noted that the modest recovery in oil prices on Tuesday reflects the market trying to stabilize after Monday’s dramatic move. Despite the pause in military action, the strategic shipping route known as the Strait of Hormuz remains far from fully operational.
The strait is one of the most critical energy chokepoints in the world. Roughly one-fifth of global oil and liquefied natural gas shipments normally pass through the narrow waterway, which connects the Persian Gulf to international markets.
Since the conflict intensified, traffic through the strait has been severely disrupted, effectively halting many shipments. The interruption has heightened concerns among energy traders, governments, and industries that rely heavily on Middle Eastern fuel exports.
Despite the slowdown, there were some signs that limited shipping activity may still be possible. Two oil tankers carrying crude bound for India reportedly managed to pass through the strait on Monday, suggesting that some cargo movements are continuing under heightened risk.
Iranian authorities strongly rejected the suggestion that diplomatic contacts with Washington had occurred. Officials in Tehran described the claims as an attempt to manipulate oil and financial markets.
The country’s powerful military organization, the Islamic Revolutionary Guard Corps, said it had launched attacks on U.S. targets in the region and dismissed Trump’s statements as “worn-out psychological operations.”
Energy analysts expect oil prices to remain volatile in the coming weeks as the situation evolves. According to analysts at Macquarie Group, crude prices are likely to maintain a strong floor even if tensions ease somewhat.
The bank said prices could remain supported in the $85 to $90 range in the near term and may naturally move back toward $110 per barrel unless shipping through the Strait of Hormuz is fully restored.
Macquarie also warned that if the strait remains effectively shut until the end of April, oil prices could surge dramatically, potentially reaching as high as $150 per barrel.
Meanwhile, the conflict has continued to damage energy infrastructure across the region. Iranian media reported new strikes targeting natural gas facilities inside the country.
According to the state-linked Fars News Agency, a gas company office and a pressure-reduction station were hit in the city of Isfahan. In a separate incident, a projectile reportedly struck a gas pipeline that supplies a power station in the southern city of Khorramshahr.
Governments and international energy organizations are now exploring ways to stabilize global supplies. To help ease the shortage, the United States has temporarily waived sanctions on Russian and Iranian oil shipments that were already at sea.
Industry sources say the move has already encouraged traders to offer Iranian crude to Indian refiners, with some cargoes reportedly being sold at a premium compared with Brent benchmark prices.
The global energy watchdog, the International Energy Agency, said it is closely monitoring the situation. Executive Director Fatih Birol confirmed that the agency is consulting with governments in Asia and Europe about the possibility of releasing additional strategic oil reserves if market disruptions worsen.
Despite these efforts, many analysts believe energy markets will remain under pressure at least until April, when the outlook for shipping through the Strait of Hormuz may become clearer.
Priyanka Sachdeva, a senior market analyst at the brokerage Phillip Nova, said the continuing disruption is likely to provide strong support for oil prices in the near term.
She noted that elevated energy prices could also add momentum to global inflation, increasing the economic risks tied to the conflict.
The broader economic impact of the war has also become a major topic of discussion among industry leaders and policymakers. At a major energy conference in Houston, oil executives and energy ministers discussed how the conflict involving the United States, Israel, and Iran could affect the global economy over the longer term.
However, Chris Wright played down the severity of the crisis, suggesting that energy markets remain resilient despite the current turmoil.
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