Oil Clears $100 Again as US Strikes on Iran Kill Peace Deal Hopes

The Guardian reported Tuesday that Brent crude climbed back above $100 a barrel after the United States carried out fresh strikes on Iranian missile sites and mine-laying vessels, extinguishing near-term hopes of a diplomatic breakthrough and leaving global energy markets on edge.

Strikes Revive Oil Price Iran Fears

The oil price Iran relationship has dominated energy markets for weeks. Brent had slipped to a one-month trough of around $96 on Monday after weekend reports suggested a peace agreement was imminent. Tuesday’s military action reversed that optimism quickly. Prices had previously peaked above $126 at the end of last month following the initial Hormuz shutdown.

Also Read: What the Strait of Hormuz Closure Means for Global Shipping

A Market Trapped in an Endless Loop

Global strategist Michael Every of Dutch lender Rabobank described the diplomatic cycle as relentlessly frustrating. Every told The Guardian that peace-deal optimism keeps returning, yet consistently fails to deliver actual results. Analysts at HFI Research declared last week that markets had reached a “point of no return” and warned of a “rude awakening” early in June. International Energy Agency chief Fatih Birol separately cautioned that July and August could push the world into a consumption “red zone,” drawing far more oil than producers can supply.

Background: A Blockade Squeezing Global Supply

The Strait of Hormuz carried roughly 20 million barrels per day before the conflict began. The ongoing closure has stripped around 14.4 million barrels daily from Gulf output, a staggering reduction by any measure. Emergency stockpile releases have covered approximately 2 million barrels per day of that shortfall. But JP Morgan warned those reserves are already “critically low” and releases are expected to cease by July. The US bank also estimated global oil demand contracted by 2.8 million barrels per day in March alone. Steeper declines of 4.3 million and 5.5 million barrels per day were projected for April and May respectively. Even so, a substantial supply gap persists. State-controlled Saudi Aramco cautioned Monday that a prolonged Hormuz closure would create supply challenges stretching well into next year.

Also Read: IEA Warns of Summer Energy Crunch as Reserve Draws Accelerate

Europe Faces Its Own Energy Squeeze

The pressure is not limited to crude markets. HSBC analysts flagged that European gas storage stands at only 37% capacity, well below the five-year seasonal average of around 50%. Storage injection rates are also running below typical levels. HSBC warned the mismatch reflects “market complacency” and could trigger sharp price swings later in summer. UK petrol prices have already reached their highest recorded levels, translating the global supply crunch directly into consumer costs.

Read Next: US-Iran Tensions Rattle Gulf Energy Markets