Oil Prices Mixed as US Airstrikes on Iran Shatter Hopes for Peace Agreement

Following U.S. airstrikes against Iran, market hopes over the weekend for a deal to end the three-month-old war were shattered. The anticipated agreement had been expected to reopen the Strait of Hormuz—a vital lifeline for global energy shipping. In response, Brent crude futures rose on Tuesday (26th), while U.S. crude futures fell, catching up to Monday's selling pressure on Brent as U.S. markets had been closed.

Market Closing Prices

• Brent Crude: Up $3.44 (3.6%), settling at $99.58 per barrel.

• West Texas Intermediate (WTI): Down $2.71 (2.8%), settling at $93.89 per barrel.

• U.S. Refined Products: Gasoline futures plummeted 7% and diesel futures fell 4%, both hitting 5-week lows.

On Monday, Brent crude had closed at its lowest level since April 20, plunging 7% as renewed optimism for a U.S.-Iran deal gripped the market. Meanwhile, the U.S. oil market was closed on Monday in observance of the Memorial Day holiday. Consequently, WTI caught up to the downward momentum on Tuesday, closing at its lowest level since April 22.

Diplomatic Strain and Accusations of Violations

While U.S. officials have repeatedly stated they are close to reaching an agreement with Iran to end the conflict, a formal deal has yet to be finalized, aside from a temporary ceasefire that minimized attacks.

• The Iranian Position: Iran stated on Tuesday that what the U.S. termed "defensive strikes" in southern Iran directly violated the ceasefire agreement. The Iranian Foreign Ministry added that the U.S. attacks on the southern Hormozgan province severely breached a fragile ceasefire that had held for nearly seven weeks. Local Iranian media reported hearing explosions in Hormozgan early Tuesday morning.

• The U.S. Position: U.S. Secretary of State Marco Rubio noted that negotiating an agreement to end the conflict could still take "a few more days."

Previously, both sides had agreed on a memorandum of understanding (MoU). The framework included halting the war and restoring shipping through blocked waters, while giving negotiators 60 days to hammer out more complex issues, including Iran's nuclear program.

Analyst Insights . We are still waiting for more details on a potential agreement," said Giovanni Staunovo, an analyst at UBS. "In the meantime, we are seeing Middle East tensions flare up again, while transit volumes through the strait remain restricted."

The U.S. airstrikes occurred precisely as Iran's chief negotiator and foreign minister were meeting with the Prime Minister of Qatar in Doha, aiming to push the peace agreement forward.