Brent Crude Climbs Nearly 2% as U.S. Strikes Iran Despite Hormuz Deal Talks
Brent Crude Climbs Nearly 2% as U.S. Strikes Iran Despite Hormuz Deal Talks
Oil Market Update — Geopolitical Risk, Strait of Hormuz & Inflation Impact
Brent crude futures jumped close to 2% in early Asian trading on Tuesday, reversing some of the previous session's heavy losses after the U.S. military launched fresh strikes on Iranian targets. The renewed escalation kept oil markets on edge even as both Washington and Tehran continued working toward a framework agreement that would end the war and reopen the Strait of Hormuz.
By 00:06 GMT, Brent crude was up $1.40, or roughly 1.5%, trading at $97.56 per barrel. The bounce came after Brent had settled 7% lower in the prior session on growing peace deal optimism.
U.S. West Texas Intermediate (WTI) crude was last quoted at $91.25 per barrel, slightly above Monday's last trade but still down approximately $5.30 — or 5.5% — from Friday's close. WTI did not have a regular settlement on Monday due to the U.S. Memorial Day holiday.
Why Oil Bounced: Fresh U.S. Military Action
The U.S. Central Command confirmed it carried out strikes on Iranian targets in the south of the country, hitting boats reportedly attempting to lay mines as well as missile launch sites. According to the U.S. military, the operation was designed "to protect our troops from threats posed by Iranian forces."
Iranian media outlets reported on Monday that explosions were heard in and around Bandar Abbas and other coastal areas near the Strait of Hormuz — a strategic chokepoint through which roughly one-fifth of global oil and gas flows.
Since the war began three months ago, Tehran has effectively halted nearly all non-Iranian shipping into and out of the Persian Gulf. This blockade choked global supply chains and helped push oil prices up by 50% or more at various points during the conflict.
Diplomatic Progress in Doha
Despite the fresh military action, diplomatic channels remained active. Iran's top negotiator and its foreign minister were in Doha on Monday for talks with Qatar's prime minister, working on a potential deal with the United States to end the conflict.
Both sides have reportedly made progress on a memorandum of understanding that would:
Halt the war immediately
Give negotiators a 60-day window to finalize a comprehensive deal
Allow Iran to clear mines from the Strait of Hormuz within 30 days, according to a Nikkei report citing a Middle East diplomatic source
End Tehran's collection of transit fees, allowing free passage for vessels from all nations
Early Signs of Shipping Activity Returning
Even before any formal deal, ship-tracking data shows the first signs of movement returning to the Strait. According to recent reports:
Three liquefied natural gas (LNG) tankers passed through the strait in recent days, headed to Pakistan, China, and India
A supertanker carrying Iraqi crude oil to China resumed its journey after being stranded for nearly three months
"Traders are betting heavily that a breakthrough will finally free up the long-paralyzed tankers stuck in and around the Strait of Hormuz," noted Tim Waterer, chief market analyst at KCM Trade. The early shipping activity supports that view, although the new strikes show how fragile the situation remains.
Risks That Could Derail the Deal
Despite the optimism, analysts warned that the deal is far from secured. U.S. President Donald Trump on Monday repeated his demand that Iran hand over its enriched uranium to the United States for destruction — a condition that could complicate negotiations.
"It's a sharp reminder that the deal could still collapse at the eleventh hour, much like the five previous attempts before it," said Tony Sycamore, market analyst at IG.
Why Oil Prices Matter for Forex Traders
Even traders who don't trade crude oil directly need to watch this market closely. Oil prices have major spillover effects on forex pairs and other instruments:
USD/CAD: The Canadian dollar is highly correlated with oil — rising crude tends to strengthen CAD against the USD.
USD/NOK: Norway is an oil exporter, so NOK strengthens with higher oil prices.
USD/JPY: Japan imports virtually all its oil; higher prices weaken JPY through worsening trade balance.
Inflation expectations: Sustained oil strength forces central banks to remain hawkish, supporting USD broadly.
Gold (XAU/USD): Energy-driven inflation has been a major weight on gold this year, even during geopolitical risk events.
Trading the Oil Volatility
For active traders in Indonesia, India, the UAE, and Vietnam, oil-driven volatility creates both opportunities and risks. Whether you're trading crude directly via CFDs or playing the correlated forex pairs, key practices for this environment include:
Position sizing: Oil can swing $3–$5 per barrel in a single session during news events — size positions accordingly.
Watch news headlines: Geopolitical news drives oil more than any technical level in the short term.
Pick a broker with tight oil spreads: Exness, XM, and RoboForex offer competitive conditions on WTI and Brent CFDs alongside their forex pairs.
Use proper stops: Wide intraday swings can take out tight stops quickly — give your trades room to breathe within your risk budget.
What to Watch Next
Several catalysts will determine whether Brent extends its bounce or rolls over again:
Further military activity — any escalation would likely push Brent back toward $100
Doha negotiations — concrete progress on the MOU could send oil sharply lower
Strait of Hormuz traffic data — more tankers transiting would confirm de-escalation
Enriched uranium question — this remains the wild card that could collapse talks
Bottom Line
Brent's near-2% rebound illustrates how fragile peace optimism remains in the current oil market. The market is caught between two opposing forces: real diplomatic progress on one hand, and continued military action on the other. Until a formal agreement is signed and the Strait of Hormuz fully reopens, oil prices are likely to remain extremely sensitive to every headline.
For traders, this means treating crude oil — and the forex pairs it influences — with respect. Use proper risk management, avoid over-leveraging on news, and choose a regulated broker with reliable execution to navigate the choppy conditions ahead.
Disclaimer: Trading oil CFDs, forex, and other financial instruments involves substantial risk and may not be suitable for all investors. The information above is for educational purposes only and does not constitute financial advice. Always conduct your own research and consider your risk tolerance before trading.