Oil Tops $100 as Iran Ceasefire Hopes Diminish

Oil markets extended gains Tuesday as prospects for a lasting halt to hostilities between the United States and Iran receded, pushing benchmark crude futures higher amid renewed concerns over supply routes in the Persian Gulf. Brent crude for July delivery rose 3.2 percent to 107.58 dollars a barrel, while West Texas Intermediate for June advanced 3.3 percent to 101.37 dollars. Both contracts have increased more than 40 percent since the conflict began in late February.

President Donald Trump described the current pause in fighting as "on massive life support" after dismissing Iran's latest counterproposal as unacceptable. He told reporters the odds of survival for the arrangement stood near 1 percent, citing persistent gaps over issues such as naval blockades, compensation for damages, and Iranian oil exports. Tehran has continued to assert control over the Strait of Hormuz, through which roughly one-fifth of global oil and liquefied natural gas shipments pass.

Traders reacted by bidding up futures contracts that reflect the risk of extended disruption. Six-month Brent prices moved above 89 dollars, while analysts noted that any renewed closure of the strait could keep markets unsettled well into 2027. Saudi Aramco chief executive Amin Nasser stated that the loss of roughly 100 million barrels from recent interruptions would delay a return to normal supply conditions.

Equity markets showed corresponding pressure. European shares fell 0.6 percent, and U.S. stock futures for the S&P 500 and Nasdaq declined 0.4 percent and 0.9 percent. In Asia the KOSPI index dropped about 3.5 percent as investors weighed higher energy costs against already elevated valuations in technology shares. The dollar strengthened as participants sought safer holdings ahead of U.S. inflation data.

OPEC production data released earlier this week underscored the supply response already under way. A Reuters survey showed April output at its lowest level in more than two decades, as several members curtailed shipments to avoid further losses from restricted passage through the strait. Energy analysts at DBS Bank observed that failure to reach an agreement by the end of May would keep upward pressure on prices in place.

Market participants also tracked preparations for Trump's upcoming visit to China, where discussions may touch on efforts to stabilize the region. Expectations remain limited, with observers focusing on whether any side agreement could ease export restrictions or reduce the chance of further escalation. Without concrete steps to reopen shipping lanes, the price signals generated by current tensions are likely to persist and transmit higher costs through transportation, manufacturing, and household energy bills.