Brent crude rebounds after fresh U.S. strikes in the Middle East raise doubts over whether diplomacy can calm one of the world’s most sensitive energy chokepoints.
Oil prices moved back toward the psychologically important $100-a-barrel threshold on Tuesday, as investors struggled to balance hopes for a possible U.S.–Iran peace deal against renewed military action in the Middle East.
Brent crude, the international benchmark, rose about 2.5% to roughly $98.50 a barrel, recovering after slipping below $100 for the first time in two weeks. The rebound followed fresh U.S. strikes in southern Iran, which added uncertainty to already fragile negotiations aimed at easing the regional crisis and restoring more normal energy flows through the Strait of Hormuz.
Markets had rallied earlier on optimism that Washington and Tehran might be moving closer to a diplomatic framework. That hope briefly pushed crude prices lower, with Brent falling nearly 6% on Monday to around $97.43 a barrel, its weakest level in about two weeks.
But the latest military developments have reminded traders that any peace deal remains highly uncertain. U.S. officials have described the strikes as defensive actions targeting missile sites and mine-laying boats, while analysts warn that even limited escalation could disrupt negotiations and delay the reopening of key shipping routes.
At the center of the market’s anxiety is the Strait of Hormuz, a narrow waterway through which a major share of global oil and liquefied natural gas exports normally passes. Any prolonged restriction there risks tightening global supply, raising transport costs and feeding inflationary pressure across energy-importing economies.
For investors, the current price movement reflects a market caught between two narratives. One is diplomatic: a peace agreement could gradually restore confidence, ease the pressure on oil prices and support global equities. The other is military: renewed strikes, retaliation or failed talks could send Brent decisively above $100 again.
The volatility has already spread beyond energy markets. Asian shares were mixed after the U.S. strikes, with investors weighing the possibility of de-escalation against the risk that the conflict could drag on. U.S. futures rose, but the uneven reaction across global markets suggested that traders remain cautious.
Even if a deal is reached, analysts caution that a full return to normal oil flows may not be immediate. Damaged infrastructure, restricted shipping lanes, insurance risks and the need to clear maritime hazards could keep supply constrained for weeks or longer.
For now, Brent’s move back toward $100 shows that peace hopes alone are not enough to calm the market. Traders want evidence that diplomacy can survive the latest escalation — and that barrels can move freely again through one of the world’s most strategically important corridors.
