Oil rebounds above $100 amid US-Iran tension pause

ISLAMABAD: (Web Desk) – Oil prices staged a strong recovery on Tuesday, with Brent crude moving back above the $100 mark after a sharp decline the previous day. The earlier drop came in response to US President Donald Trump announcing a delay in planned attacks on Iran’s energy facilities, while also describing ongoing interactions with Tehran as “very good.”

Brent crude rose nearly three percent to $102.84 per barrel, while US benchmark West Texas Intermediate climbed 3.5 percent to $91.20. This rebound followed a steep fall of more than 10 percent on Monday, when markets initially reacted positively to signs of de-escalation.

The situation remains highly fluid. Oil prices had plunged as much as 14 percent after Trump signaled a halt to strikes, but losses were later reduced when Iranian officials denied that any negotiations were taking place. Despite the recovery, Brent still ended Monday down 10.9 percent, with WTI also posting heavy losses.

Market analysts say investor sentiment is being driven more by speculation than confirmed developments. According to CFRA Research strategist Sam Stovall, the temporary pause in military action could support equities in the short term, but uncertainty continues to dominate trading behavior.

Stock markets reflected this volatility. While Asian markets fell sharply earlier in the day, European and US stocks rebounded after Trump’s announcement. However, gains were uneven, with London’s FTSE 100 closing slightly lower due to declines in energy and defense shares. Meanwhile, major US indices, including the S&P 500 and Nasdaq Composite, ended the session with solid gains.

Analysts warn that oil prices are likely to remain elevated compared to pre-conflict levels, largely due to damage to Gulf energy infrastructure and ongoing geopolitical risks. The International Energy Agency has already cautioned that the world could be heading toward one of the most severe energy crises in decades.

War, Economy, and Strategic Chokepoints: Has Iran Changed the Game?

Tensions remain high around the strategic Strait of Hormuz, through which a significant portion of global oil and gas supplies pass. Iran has warned that it could fully shut the route if its energy facilities come under attack, raising concerns about further disruptions.

Economists also fear that sustained high oil prices could fuel inflation, forcing central banks to raise interest rates and potentially slowing global economic growth. Currency markets reacted as well, with the US dollar weakening against major currencies following Trump’s remarks.

Overall, markets are expected to remain volatile, as investors react to rapidly changing developments and mixed signals from both Washington and Tehran.