Oil climbs as US-Iran ceasefire remains elusive, markets steady

Brent crude climbed back above $93 a barrel in early Asian trading, as traders kept a geopolitical premium on oil while a US-Iran ceasefire extension remained unsettled. The move came after Brent closed Friday at its lowest level since mid-April, showing how quickly prices were swinging on each signal from Washington and Tehran.

The core risk is the Strait of Hormuz, the narrow waterway between the Persian Gulf and the Gulf of Oman that the International Energy Agency calls one of the world’s most critical oil transit chokepoints. The agency says an average of 20 million barrels a day of crude oil and oil products moved through the strait in 2025, and the narrowest point is only 29 nautical miles wide. The U.S. Energy Information Administration calls it the world’s most important oil chokepoint.

That bottleneck matters because the route carries the main export flow for Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Iraq, Bahrain and Iran. The IEA says roughly 93% of Qatar’s LNG exports and 96% of the UAE’s LNG exports transited Hormuz, giving the strait outsized importance not just for crude but for gas as well. In response to the disruption, the agency said export volumes of crude and refined products through Hormuz had fallen to less than 10% of pre-conflict levels and announced a collective emergency stock release of 60 million barrels.

The latest price action turned on conflicting reports over a 60-day ceasefire extension. Reuters said the U.S. and Iran had reached an agreement in principle, but President Donald Trump had not yet approved it, while Iranian state media said the deal was not finalized. Reuters also reported Trump said he would soon decide on the proposal. That uncertainty kept traders focused on the chance of renewed disruption in a corridor that the IEA says has seen the largest supply disruption in the history of the global oil market.

For consumers, sustained higher crude would quickly work through to gasoline prices, shipping costs and broader inflation. For central banks, especially those still weighing when to ease policy, another oil shock would complicate the case for cuts by threatening to re-accelerate headline inflation and keep inflation expectations sticky. The market has already seen how violent the swings can be: Brent was on track for a loss of just over 19% in May 2026, after posting a record monthly gain of 64% in March. That volatility underscores how closely oil remains tied to the political outlook for the Strait of Hormuz.