Crude Advances Past $90 as US-Iran Settlement Window Expires

Brent crude futures rose 0.3 percent to $91.14 a barrel on Tuesday, while US West Texas Intermediate gained 42 cents to $85.04. The advance follows the expiration of a June memorandum between Washington and Tehran, which technically lapsed on Monday without a final settlement.

Hopes for a rapid resolution to the Middle East conflict, now nearing its sixth month, have diminished. Iran has signaled a more aggressive posture, and US officials indicate they are in no rush to conclude a deal.

Energy Secretary Chris Wright recently stated that the United States is adopting a long-term approach to Iran. Additionally, envoy Jared Kushner noted that the president is prepared to exercise patience in pursuing an agreement.

Negotiations remain sharply divided over the management of the Strait of Hormuz. Iran is currently discussing the vital waterway with Oman, while the United States remains uninvolved in those specific talks.

Tensions over the chokepoint have drawn stark warnings. According to a Fox News report, President Trump has threatened to bomb Oman if it interferes with a potential US-led blockade.

Market Adaptation and Pricing Risks

The prolonged conflict has driven crude oil prices up nearly 50 percent this year by disrupting regional energy flows. Despite this, Persian Gulf producers are developing more effective methods to route oil through the strait to international markets.

Saudi Arabia has begun offering cargoes sourced from outside the chokepoint. This move suggests the kingdom may be adopting a strategy similar to the United Arab Emirates, which has actively sought alternative export routes.

Market analysts warn that the combination of an expired deadline, ongoing regional fighting, and pending regulatory actions creates a fragile pricing environment. Kaynat Chainwala, AVP Commodity Research at Kotak Securities, highlighted these mounting risks.

“Brent extended gains today to $89.5 a barrel and WTI surged above $83, as prospects for a deal to ease US-Iran tensions continued to fade, with fresh fighting in Lebanon and continued attacks on Hormuz-transiting vessels keeping supply risk elevated,” said Chainwala. She noted that the 60-day window for a final settlement expired without an agreement, leaving Treasury Secretary Bessent's promised unprecedented sanctions on Iran still pending. Chainwala warned that an escalation or sanctions-driven rupture could push crude toward $95, whereas a lull in strikes would quickly cap gains.