Oil Holds Two-Day Gain as U.S.-Iran Talks Show Cracks

Yahoo Finance Singapore reported Tuesday that crude oil prices held a two-session rally as mixed signals around U.S.-Iran peace talks kept markets on edge. West Texas Intermediate steadied near $94 a barrel, while Brent closed the Tuesday session around $96.

Conflicting Headlines Whipsaw Oil Markets

The price action followed a sharp run-up of more than 7% over the prior two sessions. Iranian state news agencies cast doubt on forward progress in the negotiations. U.S. President Donald Trump simultaneously insisted the talks remained active, creating a fog of uncertainty for traders. That lack of clarity has left markets swinging on each fresh headline.

At stake is the future of flows through the Strait of Hormuz, the critical chokepoint for Persian Gulf crude exports. A sustained disruption there would force global buyers to lean heavily on stored inventories while awaiting resumed supply.

Background: A Month of Price Swings

Oil prices had actually declined through much of last month. Optimism that a U.S.-Iran deal was within reach had weighed on the market, pulling prices lower as traders priced in the eventual return of Iranian barrels. That relief rally has now unwound. Each delay in a final agreement extends the period during which global crude stocks face drawdown pressure.

The current dispute centers on written nuclear commitments. Trump has reportedly insisted that Tehran formalize specific concessions in a preliminary document. Iran had previously offered verbal assurances on certain nuclear terms, but no written accord has materialized.

Supply Picture Tightens Further

Beyond geopolitics, the physical oil market is also tightening. An industry report showed U.S. crude stockpiles fell by 6.8 million barrels last week. If official government data due Wednesday confirms the figure, it would mark the sixth consecutive weekly drawdown.

Bart Melek, global head of commodity strategy at TD Securities, told Yahoo Finance Singapore that Middle East production is unlikely to return to pre-conflict levels before October or November at the earliest. He projected that global inventories could fall by 800 million barrels in the interim. His base case for Brent crude sits at $104 per barrel through the second half of the year, with a risk of prices spiking above $150 if regional scarcity worsens.

The combination of stalled diplomacy, tightening inventories, and Hormuz uncertainty has left energy traders in a difficult spot heading into the summer demand season.

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