Oil Tops $100 as Iran Ceasefire Hopes Diminish

Oil markets extended gains on Tuesday after President Donald Trump described the month-old ceasefire with Iran as being on life support, following the rejection of Tehran's counterproposal to end the conflict. Brent crude futures climbed more than 3 percent to trade near $108 a barrel, while U.S. West Texas Intermediate futures advanced to just above $101. Both benchmarks have risen more than 40 percent since the U.S. and Israeli military campaign against Iran began on February 28.

Trump told reporters that Iran's latest offer amounted to "garbage" and left the truce in a precarious state. He compared its survival odds to those of a patient with roughly a 1 percent chance of living. The comments came as negotiators remain divided over core issues including the lifting of a U.S. naval blockade, the resumption of Iranian oil exports, and compensation for damage sustained during the fighting. Tehran has also asserted its sovereign control over the Strait of Hormuz, a chokepoint through which roughly one-fifth of global oil and liquefied natural gas shipments pass.

The renewed pessimism about a quick diplomatic resolution has pushed traders to price in greater risks of sustained supply disruptions. Six-month Brent futures have moved higher in recent sessions, and analysts at Citi noted that prices could climb further if talks remain stalled. Saudi Aramco chief executive Amin Nasser warned that any prolonged blockage of the strait could keep the market from returning to normal until 2027, with roughly 100 million barrels of oil already lost to export cuts.

Equity markets reflected the same caution. European shares fell modestly, and U.S. futures pointed to a weaker open ahead of key inflation data. In Asia, South Korea's KOSPI index retreated nearly 3.5 percent as investors reassessed the durability of recent gains. Strategists at Deutsche Bank observed that markets are now embedding a higher probability of extended volatility, with any breakthrough capable of triggering an $8 to $12 drop in Brent while renewed escalation could push prices toward $115.

Attention now turns to Trump's scheduled meetings in China this week. Expectations for concrete progress on either the Iran file or broader trade issues remain low. Observers anticipate at most modest gestures such as agricultural purchases or limited signals on rare-earth exports rather than sweeping agreements. Some analysts have suggested Trump may seek Beijing's assistance in pressing Tehran toward U.S. terms, though the likelihood of rapid results appears slim.

The episode underscores how quickly geopolitical friction can transmit into energy costs and broader financial conditions. With OPEC output already at its lowest level in more than two decades, further delays in restoring flows through the strait would likely sustain upward pressure on prices through the remainder of the year.