Global oil prices rose roughly 1% at the start of trading Tuesday, with concerns over continued Middle East supply disruption and diminishing prospects for a diplomatic resolution to the US-Iran war cited as the drivers behind the increase.
Brent crude rose $1.12, or 1.3%, to $84.89 a barrel, recovering some ground after tumbling 7% the previous day to a three-week low. US West Texas Intermediate crude climbed 77 cents, or 1%, to $81.11 a barrel.
The earlier price drop had come after President Trump said he would refrain from launching new attacks on Iran while talks continued aimed at ending the war and resolving the dispute over control of the Strait of Hormuz. That statement had briefly boosted market confidence that a genuine de-escalation was underway, contributing to Tuesday’s sharp decline.
Wednesday’s rebound reflects a swift market correction after Iran’s Foreign Ministry spokesman Esmail Baghaei rejected Trump’s characterization the following day, saying no negotiations were under way between Iran and the US and that no meeting had been planned. The direct contradiction between the two governments’ public accounts appears to have undermined the brief optimism that had driven Tuesday’s price decline, with markets adjusting back toward pricing in continued uncertainty rather than an imminent resolution.
This price volatility illustrates how sensitive oil markets have become to even single-day shifts in the conflict’s diplomatic signals, given how directly continued fighting affects shipping through the Strait of Hormuz — a waterway carrying roughly a fifth of global oil and LNG flows before the conflict disrupted normal transit. The whiplash between Tuesday’s sharp drop and Wednesday’s partial rebound reflects genuine market uncertainty about which side’s account of the negotiating situation is accurate, rather than a clear directional consensus about the war’s trajectory.
The dispute over whether talks are actually occurring adds to an already complex picture surrounding Hormuz specifically. Iranian officials, including senior Khamenei advisor Mohsen Rezaei, have separately reaffirmed that Iran will not permit any alternate shipping route through the strait and that Hormuz will not reopen on American terms — a hardline position that suggests even if diplomatic contact is occurring through some channel, Iran’s core stance on the waterway itself remains unchanged.
Given the pattern of repeated contradictory statements from Washington and Tehran throughout this conflict — on everything from ceasefire compliance to negotiating status to strike outcomes — oil markets are likely to continue experiencing this kind of volatility until a more definitive and mutually acknowledged shift in the conflict’s trajectory emerges. Whether prices continue climbing on doubts about diplomacy, or retreat again if credible signs of genuine talks materialize, will likely depend on which government’s account of the situation proves more consistent with observable developments in the coming days.
