Crude Oil Drops to Monthly Lows

WTI crude oil futures climbed to $88.5 per barrel on Tuesday after dipping to $85.5 earlier, as markets focused on potential US-Iran talks with both sides still deadlocked ahead of a ceasefire deadline. Iran has not confirmed participation in negotiations in Pakistan, while disagreements persist over key issues including access to the Strait of Hormuz. President Donald Trump said Vice President JD Vance is ready to attend talks but warned the US will not rush a deal and could resume military action if no agreement is reached. Oil prices remain volatile as traders weigh shifting prospects for diplomacy and the near standstill in Hormuz traffic, with only a handful of vessels passing. The conflict continues to disrupt supply, with traders warning of rising demand destruction and deepening shortages, while global leaders including China have called for an immediate ceasefire and the restoration of shipping flows.

WTI crude futures slipped toward $86 per barrel on Tuesday, trimming gains from the prior session following reports that Iran will send a delegation to Islamabad for a second round of negotiations with the US before the current two-week ceasefire expires. The move marks a shift from Tehran’s earlier stance that it would not engage in additional peace discussions. Meanwhile, President Donald Trump said he is unlikely to extend the existing truce if no agreement is reached by this week, adding that the Strait of Hormuz will remain blocked until a deal is secured. The strategic waterway continues to play a central role in the talks, as tensions resurfaced over the weekend after the US seized an Iranian vessel while Tehran targeted ships and reasserted control over the strait. Other major sticking points between the two sides include Iran’s nuclear program and persistent regional hostilities.

WTI crude oil futures surged more than 5% to $88.8 per barrel on Monday, after an 11.5% plunge on Friday, as tensions between the US and Iran intensified over the weekend. US President Trump said he is unlikely to extend the current truce with Tehran if an agreement isn’t reached before it ends this week, adding that the Strait of Hormuz would remain blocked until a deal is finalized. The remarks followed escalating threats and the US seizure of an Iranian cargo vessel, dimming hopes that oil exports from the region could resume in the near term. Trump also noted that a US delegation was en route to Pakistan, while Iran has yet to confirm whether it will participate in further talks. The standoff risks exacerbating the global energy crunch, with the critical Strait of Hormuz, a key artery for global oil and gas flows, remaining largely obstructed.