Oil rebounded as fresh US-Iran clashes dash hopes for Hormuz breakthrough

Global crude oil prices surged on Tuesday, 26 May 2026, after fresh US military strikes in Iran dimmed hopes for a near-term peace agreement that could have ended the three-month conflict and reopened shipping through the strategic Strait of Hormuz.

Brent climbed $3.44/barrel, or 3.6%, to settle at $99.58/barrel.

WTI fell $2.71/barrel, or 2.8%, to settle at $93.89/barrel, with US futures catching up to Monday’s selloff in Brent when American markets were closed.

Market sentiment turned sharply bullish after US forces reportedly struck targets near the Strait of Hormuz. The renewed escalation effectively undermined optimism over the weekend that Washington and Tehran were nearing a deal to extend the ceasefire and ease disruptions to regional energy flows.

After crude prices retreated significantly at the start of the week on expectations of a diplomatic breakthrough, market participants refocused on vessel movements and the prospects of restarting disrupted energy infrastructure across the region.

The Strait of Hormuz, a critical waterway that handled around one-fifth of global oil and liquefied natural gas flows during peacetime, remained effectively shut amid ongoing blockades imposed by both the US and Iran.

Although both sides reportedly continued negotiations on a potential two-month ceasefire extension that would involve Washington lifting its blockade and Tehran reopening the strait, key disagreements persisted. Tehran insisted it must retain authority to manage traffic through the chokepoint, a condition opposed by the US, European nations, and Arab states.

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