June 23 - Oil markets firmed on Tuesday following a steep decline the day before, with traders reacting to restrained optimism about progress in talks between the United States and Iran and awaiting clearer confirmation that crude shipments through the Strait of Hormuz are restoring to regular volumes.
Brent crude futures were up 24 cents, or 0.38%, to $78.15 a barrel, while U.S. West Texas Intermediate rose 33 cents, or 0.46%, to $74.19 a barrel as of 0026 GMT.
Prices had tumbled by more than 3% on Monday after Washington granted Iran a 60-day sanctions waiver following initial peace talks, and as officials reported a lull in hostilities in Lebanon under the broader agreement. The market reaction reflected an initial pricing-in of potential relief from the earlier disruption, followed by a pullback as traders assessed the durability of the developments.
The diplomatic progress came after a weekend that briefly threatened the week-old accord, including warnings from U.S. President Donald Trump that he would restart the war if Iran interfered with shipping through the Strait of Hormuz after Tehran declared the waterway closed. In a post on Truth Social on Monday, Trump said Iran will agree to have weapons inspections to ensure "nuclear honesty." He later told reporters, "If Iran doesn’t live up to their agreement, or if they’re not behaving, I will do what I have to do."
Market analysts cautioned that a cautious stance remains widespread. "There remains a prevailing dose of market scepticism, rooted in deep-seated mistrust between Washington and Tehran, suggesting that any return to pre-war oil prices is likely to be delayed rather than immediate," said Tim Waterer, chief market analyst at KCM Trade. He added that while the market had earlier priced in optimism around the roadmap and a potential reopening of the Strait of Hormuz, traders are now taking a more measured approach as they wait for concrete evidence that the deal will hold and that traffic will normalise.
Ship-tracking data indicated some pickup in movements through the strategic chokepoint. Two crude tankers carrying just under 2 million barrels of oil sailed through the Strait of Hormuz on Monday, a sign that traffic was increasing after flows weakened on Sunday due to concerns over passage.
At the same time, U.S. Department of Energy data released on Monday showed stocks in the Strategic Petroleum Reserve fell to 331.2 million barrels last week, the lowest level since June 1983, underscoring tighter U.S. supplies amid the recent U.S.-Iran conflict.
Market context
The combination of restrained diplomatic signals, modest increases in tanker transits, and a notably drawn-down SPR has left traders balancing hope for stabilisation with skepticism about how quickly conditions will normalise in the Strait of Hormuz.