traders weigh Iran diplomacy against U.S. military operations
Drone image shows the Valero Houston Refinery in Pasadena outside Houston, Texas, USA, May 12, 2026. REUTERS/Shahrzad Rasekh
Shahrzad Rasekh | Reuters
Oil prices were mixed Tuesday as U.S. military operations in southern Iran and President Donald Trump’s mixed messages about negotiations between Tehran and Washington kept traders on edge.
July futures contracts of international benchmark Brent crude oil rose 1.6% to $97.72 per barrel in Asian trade, while US West Texas Intermediate futures contracts fell 5.4% to $91.38 per barrel for June.
The US military said it was conducting operations in southern Iran targeting missile launch sites as well as ships allegedly trying to plant mines. U.S. Central Command said the actions were aimed at “protecting our troops from threats posed by Iranian forces.”
Complicating the peace talks, Trump said in his social media post on Monday that he encouraged Saudi Arabia, Qatar, Pakistan, Turkey, Egypt and Jordan to participate in the peace talks. Abraham Accords It aims to normalize Arab nations’ ties with Israel.
Trump also said negotiations with Iran were “progressing well” but warned that the United States could resume military action if talks collapse. “It will either be a big deal for everyone or no deal at all,” Trump wrote.
Swiss multinational investment bank UBS said on Friday that the global oil market is showing signs of increasing tension as inventories continue to fall due to ongoing disruptions to shipments through the Strait of Hormuz. The bank stated that observed global oil stocks decreased by a total of 246 million barrels in March and April, and cumulative production losses could exceed 1 billion barrels by the end of May.
UBS said the sharp stock declines showed the market remained “strongly undersupplied” and noted that onshore crude and refined product stocks fell despite the increase in oil stored in tankers as US exports were diverted to Asia.
