Oil Tops $100 as Iran Ceasefire Hopes Diminish

Energy costs are rising sharply for households and businesses worldwide as oil benchmarks climbed again Tuesday amid renewed doubts that a fragile Middle East truce will hold. Brent crude futures gained nearly 4 percent to about $108 a barrel while U.S. West Texas Intermediate rose above $101, extending gains that have lifted both contracts more than 40 percent since fighting began on February 28. Traders cited fading prospects for an agreement that would reopen the Strait of Hormuz, through which roughly one-fifth of global oil and liquefied natural gas moves.

President Trump told reporters the month-old ceasefire is on life support after rejecting Iran's counterproposal. He described the document as unacceptable and said the two sides remain far apart on core issues including the removal of naval restrictions, resumption of Iranian oil exports, and compensation for war damage. Tehran has asserted sovereignty over the strait and demanded sanctions relief. Both sides have imposed restrictions on shipping since the conflict began, according to shipping data and statements from CENTCOM and Iranian officials.

Saudi Aramco chief executive Amin Nasser warned that any prolonged closure could push market rebalancing into 2027 and cost roughly 100 million barrels of supply each week. OPEC output already fell in April to its lowest level in more than two decades, a Reuters survey showed. Analysts at DBS Bank and KCM Trade said prices could rise further without a deal by the end of May or could drop $8 to $12 on any genuine breakthrough.

Stock futures pointed lower in the United States and Europe while Asian markets were mixed. The STOXX 600 fell 0.6 percent and Seoul's KOSPI dropped 3.5 percent. Investors are watching U.S. inflation data due later Tuesday and Trump's meetings with Chinese President Xi Jinping later this week, where expectations center on avoiding new tariffs rather than major agreements on Iran or trade.

The oil market has priced in persistent geopolitical risk since the war started. Even if the strait reopens soon, analysts say it will take months for inventories and flows to stabilize.