Oil prices retreat slightly despite heightened Middle East tensions after Iran halts talks and threatens key shipping routes.
West Texas Intermediate crude oil trades near $90.60 per barrel, paring earlier gains after a 4.71% surge on Monday. The pullback occurs despite escalating supply risks as Iran suspends indirect negotiations with the U.S. and threatens to block the Strait of Hormuz and Bab el-Mandeb Strait, critical chokepoints for global energy flows.
Reports indicate Iran deployed additional naval mines in the Strait of Hormuz last week, while Lebanese authorities push for a broader ceasefire. U.S. officials suggest a potential memorandum of understanding to reopen the strait within days, offering a counterbalance to supply disruptions.
Demand-side pressures persist, with recent economic data weighing on market sentiment. The conflict between heightened geopolitical risks and softer demand expectations keeps prices volatile.