Oil Prices Rise as US and Iran Exchange Fire

Crude oil fell more than 3% to below $82 a barrel on Monday, extending a 2.4% loss in the previous session, as investors assessed signs of easing tensions between the US and Iran. Pakistan’s army chief visited Tehran in an effort to support diplomacy, while Qatar said it was continuing mediation efforts. Reports that Washington could soon return evacuated diplomats to the region also suggested that a broader military escalation may be less imminent. Meanwhile, Washington’s latest measures to increase economic pressure on Iran were less severe than markets had anticipated. US Treasury Secretary Scott Bessent said countries trading with Tehran would be given a deadline to wind down their links or risk unilateral penalties. Despite the measures, substantial volumes of crude continue to move through the Strait of Hormuz, with some shipments operating discreetly.

Crude oil fell 3% to around $82.5 a barrel on Tuesday, extending a 2.4% loss in the previous session, as signs of possible diplomatic progress between Iran and the US eased concerns over supply disruptions. Pakistan’s army chief concluded a one-day visit to Tehran as part of efforts to reduce tensions, with reports suggesting he carried a proposal involving potential sanctions relief under an existing memorandum of understanding. Meanwhile, Washington’s latest measures to increase economic pressure on Iran were less severe than markets had anticipated. US Treasury Secretary Scott Bessent said countries trading with Tehran would be given a deadline to wind down their links or risk unilateral penalties. Investors remain uncertain whether the strategy will affect oil flows through the Strait of Hormuz or instead increase tensions with China, Iran’s main crude buyer.

Crude oil fell below $83 per barrel on Tuesday, extending losses from the previous session as the US intensified economic pressure on Iran and its trading partners, with China reportedly not exempt from the measures. Treasury Secretary Scott Bessent announced plans to isolate Iran through sanctions targeting countries that continue doing business with the Islamic Republic, while President Donald Trump said those nations would be given a specific timeline to sever ties with Tehran or face unilateral US penalties. However, markets remain uncertain over whether the US measures will help accelerate or instead delay a potential resolution to the US-Iran conflict and the full reopening of Hormuz. Meanwhile, risks to energy flows in the Middle East remain elevated, with the UK Navy reporting that an oil tanker was struck and disabled near Oman, while Iran-backed Houthi militants said they had fired on a Saudi Arabian supertanker sailing through the Red Sea.