Oil Prices Extend Gains on Iran Ceasefire Collapse Fears

Oil prices extended gains early Tuesday after President Donald Trump told reporters that the Iran ceasefire was effectively finished, CNBC reported. Trump rejected Tehran’s latest counterproposal and described the truce as being on “massive life support.” His remarks deepened market anxiety over a prolonged Middle East war.

Crude Benchmarks Push Higher

International benchmark Brent crude futures for July climbed around 0.9% to $105.12 per barrel on Tuesday morning. U.S. West Texas Intermediate futures for June rose roughly 1% to $99.05. Both benchmarks have now surged more than 40% since the U.S. and Israeli-led military campaign against Iran began on February 28.

Trump’s language was stark. He compared Iran’s peace proposals to medical advice that a patient has a 1% survival chance. He called Tehran’s suggestions “garbage,” leaving little room for optimism that talks would resume quickly.

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Hormuz Blockage Raises 2027 Supply Warning

The threat to the Strait of Hormuz — a chokepoint for roughly a fifth of global oil supply — is sharpening longer-term concerns. Saudi Aramco CEO Amin Nasser warned investors Monday that even an immediate reopening of the strait would take months to stabilize markets. If the blockage extends past mid-June, Nasser said, full market normalization could stretch into 2027. Nasser made the remarks during Aramco’s first-quarter earnings call.

Citigroup echoed those concerns in a research note, flagging that prices remain vulnerable to further spikes if U.S.-Iran diplomacy stays deadlocked.

Also Read: Saudi Aramco Posts Earnings Amid Oil Supply Uncertainty

Diplomatic Wildcard Looms Over Markets

A potential geopolitical twist emerged Tuesday. Henry Wilkinson, chief intelligence officer at investment firm Dragonfly, told CNBC’s Squawk Box Asia that re-escalation remains a live risk. Wilkinson suggested Trump may press Chinese President Xi Jinping to lean on Tehran during U.S.-China talks expected later this week. That potential back-channel adds another layer of uncertainty for traders already navigating extreme volatility.

Citi’s note underscored the fragility of the current moment, warning that oil’s upward trajectory is far from exhausted while dealmaking remains stalled. Markets will be watching any diplomatic signals from the China-U.S. meeting closely as the next potential catalyst.

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