Brent Crude Near $108 As US Assesses Iran Proposal Amid Ongoing Hormuz Disruption
Oil prices remain elevated as US reviews Iran proposal and Hormuz disruptions continue.
Brent crude prices held steady above the $108-per-barrel mark on Tuesday as markets assessed a fresh proposal from Iran, even as the strategically vital Strait of Hormuz remained effectively shut, keeping global supply concerns elevated.
Brent crude for June settlement was largely unchanged at around $108.23 per barrel, while the more actively traded July contract hovered near $101.95. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures edged higher, rising modestly to about $96.65 per barrel. The stability in prices reflects a market that has already priced in significant geopolitical risk, even as uncertainty persists.
The current price environment is being driven primarily by ongoing tensions between the United States and Iran, now stretching into several weeks. Tehran has reportedly floated a proposal that includes conditions for de-escalation, such as easing U.S. naval restrictions and revisiting frameworks governing transit through the Strait of Hormuz. However, Washington has remained cautious, with key disagreements—particularly around Iran’s nuclear program—continuing to stall progress toward a broader agreement.
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The Strait of Hormuz, a narrow but critical waterway through which roughly one-fifth of global oil supply typically flows, has seen severely restricted traffic amid the standoff. Shipping disruptions and a near-halt in tanker movement have significantly tightened supply chains, amplifying concerns across energy markets. Analysts note that even if a diplomatic breakthrough is achieved, it could take months for logistics and production systems to normalize.
Market participants have increasingly focused on physical supply constraints rather than diplomatic rhetoric. The closure—or partial blockade—of Hormuz has created what some experts describe as one of the most significant energy supply shocks in recent decades, pushing prices higher despite mixed signals from negotiations. The International Energy Agency has also warned of an “unprecedented” disruption in global oil flows if the situation persists.
Looking ahead, oil prices are expected to remain volatile, with traders closely monitoring both geopolitical developments and supply indicators. While Iran has indicated a willingness to reopen the strait under certain conditions, the lack of consensus with the U.S. suggests that a swift resolution remains unlikely. As a result, Brent crude is likely to stay elevated near current levels, with risks skewed to the upside if disruptions continue.
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