Oil Prices Climb Back to $98 as Market Doubts US-Iran Peace Deal
Jakarta, CNBC Indonesia - Oil prices rose again on Tuesday morning (26/5/2026) after a sharp decline the previous day to a two-week low. Market participants are scaling back optimism that a US-Iran peace deal will be reached soon.
According to Refinitiv data as of 9.35am WIB, July Brent crude (LCOc1) stood at $98.12 per barrel, while West Texas Intermediate (WTI/CLc1) was at $91.77.
The rise followed Brent closing at $96.14 on Monday, a sharp drop from May 22’s $103.54. Within less than a week, Brent had fallen over $15 from its peak of $112.10 on May 18.
WTI followed a similar pattern, dropping from $108.66 on May 18 to around $91. The main pressure came early in the week when markets reacted to reports that Washington and Tehran were nearing a peace memorandum including the reopening of the Strait of Hormuz.
However, the euphoria is fading. Reuters reported senior Iranian officials were in Doha to discuss a draft agreement with the US and Qatar’s Prime Minister. Meanwhile, both Washington and Tehran are dampening market expectations of a swift breakthrough.
US President Donald Trump even instructed his negotiation team not to rush the deal. Trump reiterated the blockade on Iranian vessels in the Strait of Hormuz remains in place until a formal agreement is signed.
Markets are realising a key point: the peace deal is still fraught with complex details.
Issues such as the release of Iran’s frozen overseas assets, the future of Tehran’s nuclear programme, and Israel’s role in negotiations have introduced new uncertainties. Iranian media Tasnim reported Washington is still blocking key clauses of the agreement, particularly regarding the release of Iran’s oil funds held under sanctions.
Amid ongoing fragile negotiations, the US military launched strikes on southern Iran on Monday, targeting vessels allegedly laying mines and missile launch sites. Washington described the operation as defensive.
These developments have prompted energy markets to reassess global supply risks.
Investors are focused on the Strait of Hormuz, the narrow waterway that serves as the lifeline for global oil distribution. During the conflict, blockades in the region disrupted Middle Eastern supply chains and pushed energy prices sharply higher throughout May.
Nikkei reported the US and Iran are discussing a plan to reopen the Strait of Hormuz around 30 days after a peace deal is reached. However, there is still no certainty on when the agreement will be signed.
Market doubts are reflected in global movements. Asian markets traded mixed on Tuesday morning. Japan’s Nikkei index edged lower after surging over 3% the previous day on peace hopes. The US dollar strengthened slightly on increased safe-haven demand.
Bond markets remain under pressure from inflation concerns. Recent energy price spikes have led investors to factor in prolonged high interest rates, both in developed and emerging markets.
Standard Chartered global research chief Eric Robertsen said commodity supply disruptions will not resolve quickly. He noted that the impact of war and government fiscal support needs could worsen sovereign debt conditions amid high funding costs.