Oil Prices Climb as Trump Declares Iran Ceasefire on “Life Support”

CNBC reported Tuesday that oil prices extended a multi-session rally after President Donald Trump declared the U.S.-Iran ceasefire effectively on its last breath. Trump rejected Tehran’s latest counterproposal outright, deepening fears that the broader Middle East conflict has no near-term exit.

Crude Benchmarks Push Higher on Escalation Risk

Brent crude futures for July added 0.30%, settling around $104.51 per barrel. U.S. West Texas Intermediate for June gained a similar margin, reaching roughly $98.40. Both benchmarks have now surged more than 40% since the U.S. and Israeli-led military campaign against Iran began in late February.

Trump described the ceasefire’s condition in unusually blunt terms. He compared it to a patient whose doctor gives a 1% survival chance, and dismissed Iran’s suggested terms as “garbage.” Markets interpreted the remarks as a clear signal that diplomatic resolution remains distant.

Background: A War That Has Rattled Energy Markets Since February

The conflict began on February 28, when a coordinated U.S. and Israeli military operation targeted Iranian assets. Since then, energy markets have priced in persistent supply disruption risk across the Persian Gulf corridor. An Iranian drone strike in March struck oil storage infrastructure in Oman, briefly threatening shipping lanes through the Gulf of Oman. The episode underscored how quickly ground-level developments translate into commodity price moves.

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Analysts at Citi noted in a client memo that oil prices remain volatile and could push higher still if U.S.-Iran negotiations stay stuck. The bank flagged continued dealmaking friction as the primary upside risk for crude.

Xi Talks Could Be a Wild Card This Week

Henry Wilkinson, Chief Intelligence Officer at investment intelligence firm Dragonfly, told CNBC’s Squawk Box Asia that a renewed flare-up in the Iran conflict is a credible scenario. He flagged the possibility that Trump could ask Chinese President Xi Jinping to apply pressure on Tehran during U.S.-China talks expected later this week. Whether Beijing would play such a role remains unclear, but the prospect added another layer of uncertainty to an already tense market.

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Traders will be watching any signals from the China-U.S. meetings closely. A breakthrough could ease oil’s recent climb. Absent that, supply-risk premiums appear firmly embedded in crude pricing for now.

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