Oil prices extended their rebound on Tuesday as the lack of progress in negotiations between the United States and Iran continued to weigh on expectations of a reopening of the Strait of Hormuz.
Ongoing disagreements have reduced the likelihood of a near-term breakthrough, keeping markets focused on the risk of prolonged supply disruptions.
With a key share of crude and refined products effectively constrained, the market remains structurally tight, reinforcing upward pressure on prices.
Looking ahead, oil markets are likely to remain highly sensitive to geopolitical developments and the evolution of negotiations. Continued constraints in the Strait of Hormuz could sustain elevated prices, while also increasing the risk of demand erosion if prices continue to climb as economic growth comes under pressure.
Conversely, any credible diplomatic progress could trigger a price readjustment as restricted supply returns to the market. However, the latter could be gradual as returning production levels to normal conditions could take weeks, which could limit the speed of any price correction.
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