Oil Prices Ease After U.S. Confirms Iran Ceasefire Still Holds
CNBC reported Tuesday that Iran ceasefire oil prices pulled sharply lower after Defense Secretary Pete Hegseth told reporters the U.S.-Iran truce remained intact, reversing a steep Monday rally driven by fears of renewed conflict in the Gulf.
International benchmark Brent crude dropped more than 2% to around $111.45 a barrel by mid-morning in New York. U.S. West Texas Intermediate futures fell more than 3% to approximately $102.65. Both contracts had surged over 4% the previous session.
Hormuz Strait Reopened Under U.S. Military Escort
The sell-off followed a direct escalation on Monday. Iran launched drones and missiles at the United Arab Emirates. Washington responded by sinking Iranian naval vessels near the Strait of Hormuz. The U.S. then launched an operation to restore commercial transit through the waterway.
Hegseth confirmed that two American commercial vessels, accompanied by U.S. destroyers, had passed through the strait safely. Danish shipping giant Maersk confirmed one of its vessels crossed under U.S. military protection on Monday.
General Dan Caine, chairman of the Joint Chiefs of Staff, told reporters Iran’s latest actions fell below the threshold for resuming major combat operations. Hegseth said the situation was being monitored closely but that the ceasefire was holding.
Background: A Fragile Truce Under Repeated Strain
The ceasefire between Washington and Tehran has been volatile since it was first agreed. Iran has repeatedly tested its boundaries. President Trump warned publicly on Monday that Iran would face total destruction if it targeted American ships protecting commercial traffic through the strait. Iranian Foreign Minister Abbas Araghchi pushed back, arguing on social media that the standoff proved diplomacy remained the only viable path, noting progress in Pakistan-mediated talks.
The Hormuz strait is the world’s single most important oil chokepoint. Roughly 20% of global crude supply transits the waterway. Its prolonged closure has rattled supply chains far beyond the Gulf region.
Supply Buffers Thinning, Goldman Warns
Goldman Sachs flagged growing supply risks in a research note Monday. The bank estimated total global oil stocks at around 101 days of demand. That figure could drop to 98 days by the end of May. Refined product buffers, particularly naphtha, LPG, and jet fuel, are depleting faster than headline inventory numbers suggest.
The bank identified South Africa, India, Thailand, and Taiwan as markets facing elevated risks of localized product scarcity. Chevron CEO Mike Wirth echoed those concerns at the Milken Institute Global Conference, warning that the question in some regions was no longer one of price but of physical availability.
Iraq, an OPEC producer, is reportedly offering steep discounts to term buyers for barrels loaded this month, though tankers must be willing to transit Hormuz to collect the cargo.
Read Next: What the Strait of Hormuz Closure Means for Global Energy Markets
