Brent crude eased below $95 on Tuesday, settling at $94.77 per barrel, as markets weighed cautious progress in US–Iran talks against persistent geopolitical risks around the Strait of Hormuz.
The 0.74% decline reflects a market that is neither fully risk-on nor risk-off. Sentiment was softened by reports that Iran will now send a delegation to Islamabad for a second round of negotiations with the United States, ahead of the expiry of a two-week ceasefire. The move marks a shift from Tehran’s earlier position that it would not engage further, briefly easing fears of immediate escalation.
But the broader risk picture remains intact. US President Donald Trump has signalled he is unlikely to extend the truce if no agreement is reached this week, adding that the Strait of Hormuz will remain blocked until a deal is secured. That keeps one of the world’s most important oil transit routes at the centre of pricing risk.
Recent developments have reinforced how quickly that risk can resurface. Weekend tensions—triggered by reports of US action involving an Iranian vessel and subsequent Iranian retaliation against shipping activity—highlight how fragile conditions remain around the waterway. Even small incidents continue to translate into price volatility.
Beyond the ceasefire timeline, the core disagreements remain unresolved, particularly Iran’s nuclear programme and wider regional hostilities. These structural issues continue to limit confidence in any sustained de-escalation.
Despite the latest dip, oil remains elevated compared to a year ago. Brent is down 5.17% over the past month, reflecting intermittent easing of war-risk premiums, but is still up 40.53% year-on-year, underscoring how geopolitical tensions have permanently lifted the price floor.
