Oil Slips as US-Iran Uncertainty Persists

Brent crude futures slipped toward $91 per barrel on Tuesday, trimming gains from the previous session as investors continued to assess uncertainty surrounding US-Iran peace negotiations. On Monday, Iranian media reported that Tehran had suspended communications with Washington in response to Israeli strikes in Lebanon. Meanwhile, President Donald Trump said talks are still ongoing, adding that Iran has not informed Washington of any decision to end negotiations. President Trump and Israeli Prime Minister Benjamin Netanyahu also offered differing accounts of a recent call regarding the conflict in Lebanon. At the same time, Lebanese authorities called for any extension of the ceasefire agreement between Hezbollah and Tel Aviv to cover all Lebanese territory, underscoring the complexity of efforts to ease regional tensions.

WTI crude futures fell toward $91 per barrel on Tuesday, paring gains from the previous session as ongoing peace talks between the US and Iran showed little progress, keeping markets cautious about supply disruptions. On Monday, Iranian media reported that Tehran had suspended communications with Washington in response to Israeli strikes in Lebanon. The report also indicated that Iran and its regional allies are considering the full closure of the Strait of Hormuz and the Bab el-Mandeb Strait, a key alternative route for global oil shipments. Meanwhile, President Donald Trump said negotiations remain ongoing and noted that a memorandum of understanding with Iran to reopen the Strait of Hormuz could be reached within the next week. Separately, Lebanese authorities called for all Lebanese territory to be covered under any extension of the ceasefire agreement between Hezbollah and Tel Aviv.

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.