Oil prices rose in early Asian trade on Tuesday as fresh US strikes in Iran cut into investor optimism about a peace deal. Brent crude futures climbed more than 1% to US$97.32 a barrel. Iran’s top negotiator and foreign minister met Qatar’s prime minister in Doha to discuss a US deal to end the war, an official briefed on the visit told Free Malaysia Today. Both Washington and Tehran played down hopes for an imminent breakthrough.

The Nikkei newspaper said both sides were discussing a plan to reopen the Strait of Hormuz about 30 days after any deal. US Central Command also said its forces hit boats trying to lay mines and missile launch sites in southern Iran on Monday, Investing.com reported. Washington called the strikes defensive. Both sides said they had agreed in principle to a memorandum of understanding that would freeze the war and give negotiators 60 days to land a final deal. US West Texas Intermediate crude was up slightly from Monday but down 5.5% from Friday’s close on Memorial Day-thinned trade.

For oil prices, the split shows up across markets. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8% on Tuesday. Japan’s Nikkei slipped 0.2%. Nasdaq futures held 0.9% higher and S&P 500 futures gained 0.68%. European futures were mixed: EUROSTOXX 50 eased 0.36%, FTSE added 0.4% and DAX lost 0.43%, The Jakarta Post reported. Bonds steadied after last week’s rout on inflation worries tied to higher energy prices. The 10-year US Treasury yield slid to 4.50%, while the two-year stayed near 4.06%. Spot gold fell 0.5% to US$4,545.90 an ounce.

Malaysia watches both lines closely. Lower oil prices ease pressure on the country’s RM5 billion a month petrol and diesel subsidy bill. A Brent move back from US$111 to near US$97 would slow that bleed. Tehran’s grip on Hormuz still has Malaysian refiners and traders parsing every headline. The government has separately said the country’s oil supply will hold until end-July. A reopening within 30 days of a deal would unwind much of the recent price spike.

Joseph Capurso, a strategist at Commonwealth Bank of Australia, said markets are desperate for closure on the war. “The market wants to believe that it’s all going to end soon, because the war not ending is quite bad for the world economy,” he said. He flagged the Hormuz timeline as the biggest single variable for oil prices in the weeks ahead. Standard Chartered’s head of global research Eric Robertsen separately warned that the commodity supply dislocations behind the rally would take months to resolve. He also flagged fiscal risks as the more sustained pressure on sovereign balance sheets.

What The Oil Prices Move Means For Markets

The Tuesday tick higher is a small move against the bigger arc. Brent traded above US$111 a barrel only weeks ago. A Hormuz reopening would walk that back fast. Until the Doha talks deliver something concrete, oil prices stay hostage to the next strike or the next leak. Currency markets read the tape the same way. The dollar steadied on safe-haven demand and stayed near a six-week high. The euro fell 0.06% to US$1.1636 and sterling eased to US$1.3498. Each move tracks the same question: how long the war runs.

Sources: Free Malaysia Today | Investing.com | The Jakarta Post

This article was drafted by URUS AI’s editorial system and reviewed by our editorial team. Source links are provided above.