Global oil markets edged higher on Tuesday, reversing part of the losses recorded in the previous session, as renewed uncertainty over the conflict in the Gulf reignited concerns about supply disruptions.
Benchmark Brent crude rose 2.9 per cent to $102.83 per barrel, while U.S. West Texas Intermediate (WTI) gained 2.8 per cent to $90.62, reflecting a cautious rebound driven by geopolitical risk and tightening supply expectations.
The recovery comes amid conflicting signals from Washington and Tehran. U.S. President Donald Trump had earlier suggested that negotiations with Iran were underway and could yield a breakthrough, prompting a sharp decline in oil prices on Monday. However, Iranian authorities swiftly denied any such talks, dismissing the claims as misinformation and intensifying uncertainty in global energy markets.
Oil prices had plunged more than 10 per cent in the previous session after Trump announced a five-day delay in planned U.S. strikes on Iranian energy infrastructure, a move that temporarily eased fears of immediate escalation.
According to analysts at KCM Trade, the delay effectively removed a significant portion of the “war premium” embedded in oil prices. However, Tuesday’s rebound suggests that underlying risks remain firmly in place.
“Today’s moderate bounce is just the market finding its footing,” said Tim Waterer, chief market analyst at KCM Trade, noting that despite the pause in military action, the strategic importance of the Strait of Hormuz continues to weigh heavily on investor sentiment.
Central to the market’s anxiety is the Strait of Hormuz, a critical maritime corridor through which roughly one-fifth of the world’s oil and liquefied natural gas supplies pass.
The ongoing conflict has severely disrupted shipments through the strait, raising fears of prolonged supply constraints. Although some tanker activity resumed,with two vessels reportedly transiting the route toward India, analysts caution that the waterway remains far from fully operational.
The potential for sustained disruption has prompted forecasts of higher price floors. Analysts at Macquarie Group estimate that Brent crude could stabilise within an $85–$90 range in the near term, with a possible rebound toward $110 if tensions persist.
Tensions in the region continue to escalate, with reports of fresh attacks on energy infrastructure within Iran. According to local sources, gas facilities in Isfahan and pipeline infrastructure in Khorramshahr were struck, highlighting the vulnerability of critical energy assets.
Iran’s Revolutionary Guards have also reportedly targeted U.S. interests in the region, while dismissing Washington’s claims of diplomatic engagement as “psychological operations.” The exchange of rhetoric and military actions has deepened uncertainty, complicating efforts to stabilise markets.
In response to the evolving crisis, the United States has taken steps to mitigate supply shortages by temporarily easing sanctions on Russian and Iranian crude already at sea. This policy shift has enabled traders to redirect shipments, with reports indicating that Iranian oil is being offered to Indian refiners at a premium to Brent benchmarks.
Meanwhile, the International Energy Agency is actively consulting with governments across Asia and Europe on the potential release of strategic petroleum reserves to cushion the market against further shocks.
Executive Director Fatih Birol indicated that coordinated action could be deployed if necessary, signalling a readiness among major economies to intervene in stabilising global energy supplies.
Beyond immediate supply concerns, rising oil prices are reigniting fears of inflationary pressures across the global economy. Elevated energy costs typically translate into higher production and transportation expenses, which can cascade into broader price increases for goods and services.
Analysts warn that sustained oil price volatility could complicate monetary policy decisions for central banks, many of which are already navigating a delicate balance between controlling inflation and supporting economic growth.
Priyanka Sachdeva, a senior analyst at Phillip Nova, noted that markets are bracing for continued disruption at least through April, with geopolitical risks acting as a persistent tailwind for oil prices.
