Oil prices climbed sharply on Tuesday as markets braced for a high-stakes U.S. ultimatum to Iran: reopen the Strait of Hormuz by 8 p.m. EDT (00:00 GMT Wednesday) or face devastating American strikes.
Brent crude futures jumped $1.74, or 1.6 percent, to $111.51 a barrel by 05:30 GMT, while U.S. West Texas Intermediate crude surged $3.45, or 3.1 percent, to $115.86. The gains extended a rally driven by fears that the world’s most critical oil chokepoint — through which roughly one-fifth of global supply normally flows — could remain blocked for weeks or months.
President Donald Trump has warned he will “rain hell” on Tehran if the Islamic Republic does not comply, issuing the explicit threat after Iran rejected a U.S. ceasefire proposal mediated by Pakistan. Iranian officials countered that only a permanent end to the conflict would suffice and flatly refused pressure to reopen the strait, leaving diplomacy on life support.
The rejection has kept battlefield risks firmly in focus, analysts said. “Oil is holding its gains because the battlefield risk is no longer theoretical,” said Priyanka Sachdeva, senior market analyst at Phillip Nova in Singapore. “Attacks on energy and shipping assets continue, and traders fear that even if the war ends, damage to infrastructure could sideline barrels for months, not days.”
Iranian forces effectively sealed the Strait of Hormuz after U.S. and Israeli strikes began on February 28. Since then, exports from several Gulf producers have collapsed, forcing Asian and European refiners to scramble for replacement barrels. Spot premiums for U.S. WTI crude have rocketed to record highs as a direct result.
“Clock-watching is now playing almost as big a role in oil markets as the fundamentals themselves in the run-up to Trump’s ultimatum deadline,” noted Tim Waterer, chief market analyst at KCM Trade in Sydney.
While the possibility of a last-minute ceasefire still offers a potential relief valve that could spark a sharp price drop, persistent worries about the Hormuz chokepoint and damaged energy facilities are providing a firm floor under prices, he added.
Tensions remained dangerously high on the ground Tuesday. Explosions rocked the Syrian capital Damascus and surrounding countryside as Israeli forces intercepted Iranian missiles, Syrian state television reported. In Saudi Arabia, authorities said they destroyed seven ballistic missiles launched toward the kingdom’s Eastern Region, with debris falling near energy facilities.
Diplomacy offered only faint hope. The United Nations Security Council is scheduled to vote later Tuesday on a resolution aimed at protecting commercial shipping in the Strait of Hormuz. But the measure has been significantly watered down after China, a veto-wielding permanent member, opposed any authorization of force, diplomats said.
The conflict, which erupted in late February, has already squeezed global crude supply far more severely than many traders anticipated. With Iranian forces controlling access to the strait and infrastructure damage mounting, the market is pricing in the very real possibility that hundreds of thousands of barrels per day could remain offline long after any ceasefire.
For now, the world’s oil traders are living minute by minute. As the clock ticks toward Trump’s deadline, every statement from Washington or Tehran, every intercepted missile, and every reported explosion near energy assets is moving prices in real time — a stark reminder that geopolitics, not geology, is once again the dominant force in the crude market.
WHAT YOU SHOULD KNOW
oil prices have surged sharply to over $111 (Brent) and $115 (WTI) as President Trump’s ultimatum to Iran reaches its critical deadline tonight: reopen the Strait of Hormuz — which handles one-fifth of global oil supply — or face direct U.S. strikes on Iranian infrastructure.
The single most important factor: Iran’s rejection of a ceasefire and refusal to reopen the strait has turned a theoretical risk into an immediate supply crisis, with the chokepoint effectively closed since late February and infrastructure damage threatening prolonged disruptions.
Markets are now in clock-watching mode, where geopolitics outweigh fundamentals, keeping prices elevated despite any faint hopes of a last-minute deal.
