Brent Crude Rises As Iran Vows Retaliation Over US Strikes And Ceasefire Violations

Brent crude oil prices climbed on Tuesday as escalating geopolitical tensions involving the United States and Iran, alongside mixed signals on ceasefire negotiations, kept global energy markets on edge. Brent futures for July delivery rose 3.4% to $99.39 a barrel in London trading, while West Texas Intermediate (WTI) futures for July fell 3.9% to $92.85 per barrel compared with Friday’s close. Trading in WTI was thinner than usual due to the US Memorial Day holiday on Monday, which left markets partially fragmented.

The price movement followed reports of US military operations in southern Iran, where US Central Command said it carried out “self-defense strikes” targeting vessels allegedly attempting to deploy mines, as well as missile launch sites. The US military stated the actions were intended “to protect our troops from threats posed by Iranian forces,” though no independent verification of the extent of damage was immediately available.

In response, Iran’s Islamic Revolutionary Guard Corps (IRGC) said it would retaliate against what it described as ceasefire violations, claiming its forces had engaged unidentified drones and an F-35 fighter jet that allegedly entered Iranian airspace. The statement further escalated already heightened concerns over direct or indirect military confrontation between the two sides.

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Market sentiment was further influenced by conflicting diplomatic messaging. Iranian-linked media reports described recent talks with the United States as “overall good,” while also stating that any potential agreement would depend on the release of $24 billion in frozen Iranian assets. At the same time, US President Donald Trump said negotiations were “proceeding nicely,” but warned that military action could resume if talks collapsed, underscoring the fragility of the diplomatic process.

Adding to geopolitical uncertainty, Trump also reiterated his push for additional countries, including Saudi Arabia, Qatar, Pakistan, Türkiye, Egypt, and Jordan, to join the Abraham Accords aimed at normalising relations with Israel. The overlapping diplomatic tracks have contributed to uncertainty in energy markets already sensitive to supply disruptions.

Analysts and financial institutions have warned that tightening supply conditions are amplifying price volatility. UBS noted that global oil inventories have fallen sharply in recent months, with observed stockpiles dropping significantly across March and April. The bank said cumulative production losses could exceed one billion barrels by the end of May, indicating a structurally undersupplied market.

According to UBS, even as some oil is being diverted into storage on tankers due to rerouted exports, onshore inventories of crude and refined products continue to decline.  The disruption, combined with ongoing geopolitical risks and uncertainty around key shipping routes such as the Strait of Hormuz, has reinforced expectations of sustained pressure on global oil prices. With tensions between Washington and Tehran showing no clear resolution path, traders remain focused on developments that could further impact supply stability in one of the world’s most critical energy corridors.

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