Oil Rises Again After U.S. 'Defensive' Strikes in Southern Iran

SadaNews - Oil prices rose once again after new U.S. military strikes in Iran overshadowed prospects for reaching a temporary agreement between Tehran and Washington to reopen the Strait of Hormuz, as talks are expected to continue for several more days.

Brent crude, the global benchmark, climbed above $98 a barrel after falling more than 7% on Monday, while West Texas Intermediate was near $92.

The U.S. Central Command stated that American forces struck missile launch sites and boats attempting to plant mines, following reports of explosions around the strait in Iranian media.

For his part, Secretary of State Marco Rubio indicated to reporters in India on Tuesday that the negotiations "will take a few days" as both sides discuss specific wording in a preliminary document.

Futures contracts for crude had taken a sharp downturn in the opening session of the week after President Donald Trump announced that the talks "are going well," while also threatening more strikes if they fail.

New Strikes Disrupt Negotiation Process

Oil prices, which rose in March and April, are on track to record losses in May, as the fragility of the ceasefire and efforts to reopen Hormuz overshadow the rapid declines in inventories.

The strait, which is the main waterway through which one-fifth of the world’s oil and liquefied natural gas flowed in times of peace, remains effectively closed and is subject to blockades from the United States and Iran.

The United States and Iran are negotiating an agreement that would extend the ceasefire for about two months, with the United States lifting its blockade and Tehran reopening Hormuz. However, points of contention remain, as Tehran insists on managing maritime traffic through the choke point, which the United States, Arab states, and Europe assert cannot be allowed.

Israel Intensifies Strikes in Lebanon

Sol Kafounik, chief energy analyst at MST Marquee, stated that it is still "premature to think about reaching a peace agreement, let alone committing to it.” He added, “There have been claims from both sides in recent months regarding the success of negotiations or reopening the strait, but they have not materialized."

In a separate post, Trump mentioned that the destruction of enriched uranium in Iran is the optimal option, with the possibility of delivering it to the United States. Washington has pointed to Iran’s nuclear program as a main reason for its involvement in the conflict alongside Israel, asserting that Tehran poses a threat as it seeks to develop nuclear weapons.

In light of additional challenges, Israel announced on Monday that it would intensify strikes in Lebanon against Iran-backed Hezbollah. Tehran demanded an end to hostilities in that country as part of any agreement with the United States.