Oil Prices Rebound as Iran Reviews Ceasefire Proposal Amid Market Volatility

International oil prices climbed approximately 1% on Tuesday, hitting a one-week peak as the market closely watches Iran's response to a U.S.-proposed ceasefire agreement draft. Brent crude futures rose $1.02 to settle at $96.00 a barrel, while U.S. West Texas Intermediate (WTI) futures gained $1.60 to close at $93.76, marking their highest settlement prices since May 26.

Iranian media reported that the country is reviewing the U.S. proposal, though direct contact with Washington has not occurred in recent days. U.S. President Trump indicated that negotiations are ongoing. The conflict, which began over three months ago with U.S. and Israeli airstrikes against Iran, remains in a stalemate. Despite a fragile ceasefire, the critical Strait of Hormuz remains largely closed, severely restricting maritime traffic.

Since the conflict's outbreak, Iran has effectively blocked most non-Iranian vessels from entering or leaving the Persian Gulf, disrupting about one-fifth of global crude oil and liquefied natural gas (LNG) transport and contributing to a more than 50% surge in oil prices. The U.S. has also maintained blockades on Iranian ports.

Analysts at Ritterbusch and Associates noted the market's sharp fluctuations, attributing them to "contradictory messages from the White House and divisions between Trump and Israeli Prime Minister Netanyahu." They added, "There are still many variables in this event, but ultimately, the possibility of a large-scale reopening of the Strait of Hormuz does not appear any closer than it did two months ago." Trump expressed optimism about reaching an agreement within the week to extend the April ceasefire and reopen the Strait of Hormuz. Meanwhile, U.S. Secretary of State Marco Rubio informed lawmakers that Iran had agreed to discuss aspects of its nuclear program previously refused, though he cautioned this does not guarantee a final deal.

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There are still many variables in this event, but ultimately, the possibility of a large-scale reopening of the Strait of Hormuz does not appear any closer than it did two months ago.