Oil Rises on US-Iran Deal Uncertainty

Oil prices pared some gains but remained sharply higher on the first trading day of June, with WTI crude futures rising 6% to trade above $92 per barrel. Prices initially surged more than 8% after Iranian media reported that Tehran had suspended communications with Washington in response to attacks in Lebanon and was preparing to fully close the Strait of Hormuz, raising fears of further disruptions to global oil supplies. However, crude moved away from session highs after US President Trump said that Israel and Hezbollah had agreed to halt attacks against each other in Lebanon and that discussions with Iran were continuing. Trump also downplayed Iran's decision to suspend indirect talks, stating that he did not care whether the negotiations were over. Still, market concerns remained elevated as the developments cast doubt on the prospects for an interim peace agreement, particularly amid fresh clashes involving US and Iranian forces near the Strait of Hormuz.

WTI crude oil futures surged more than 7% to above $94 per barrel on Monday after reports that Iran would suspend exchanges of messages with the US in response to Israel’s escalating military operations in Lebanon. According to the semi-official Tasnim news agency, Iran’s negotiating team will halt talks and the exchange of documents through mediators, accusing Washington of sending mixed signals and prolonging negotiations. Earlier in the day, Foreign Ministry spokesperson Esmail Baghaei said Iran remained engaged with the US but continued to do so with “distrust.” The development raised concerns about the prospects for an interim peace agreement, particularly as US and Iranian forces were involved in fresh clashes near the Strait of Hormuz. President Donald Trump nevertheless said talks with Tehran would “work out well,” despite the renewed tensions.

WTI crude oil futures rose more than 3% to above $90 per barrel on Monday, rebounding from a six-week low as uncertainty persisted over a proposed US-Iran agreement to extend a ceasefire and reopen the Strait of Hormuz. Washington and Tehran continued exchanging messages over revisions to the draft deal, though there was little indication of a breakthrough. President Donald Trump said overnight that “it will all work out well in the end,” even as military activity continued on both sides. Iran also signaled that any agreement would need to include a truce in Lebanon, where Israel has expanded its largest ground operation in decades. Elsewhere, Ukraine intensified attacks on Russian refineries, while Moscow banned jet fuel exports through November to prevent domestic shortages. Despite recent volatility, oil prices remain roughly 30% higher than before the conflict began in late February.