Brent Rises as U.S. Strikes Cast Doubt on Iran Peace Deal


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Brent crude oil futures rebounded Tuesday (5/26) morning 
after the U.S. carried out fresh attacks on Iran despite an existing ceasefire, 
raising doubts that a peace deal with Iran was imminent.

   By 08:30am ET, ICE Brent for July delivery was up $2.92 to trade near $99.06 
bbl, and NYMEX WTI for July delivery fell $3.88 to $92.72 bbl.

   Downstream, NYMEX ULSD futures for June delivery retreated $0.0796 to 
$3.8082 gallon, and front-month NYMEX RBOB futures fell $0.1308 to $3.3231 
gallon. 

   The US dollar index softened by 0.135 points to 99.05 against a basket of 
foreign currencies.

   Oil prices slumped after several senior U.S. officials over the weekend 
touted significant progress in negotiations with Iran to end the war that has 
been disrupting more than 15% of global oil supply for nearly three months. On 
Monday, U.S. President Donald Trump in a social media post said that 
negotiations were "proceeding nicely".

   Ten hours after the statement, the U.S. military launched strikes on 
southern Iran, saying they had targeted missile sites and ships laying mines in 
the Strait of Hormuz. Tehran said it considered the attacks a breach of the 
ceasefire and announced possible retaliatory strikes on U.S. military bases in 
the region.

   Following Tehran's response to the attacks, U.S. Secretary of State Marco 
Rubio on Tuesday qualified his earlier statements about an imminent peace deal, 
saying negotiations could take several more days.

   NYMEX traded oil and product futures, meanwhile, slipped from the previous 
trading day as there was no settlement Monday due to a U.S. holiday. WTI 
continued to trade at a steep discount to Brent, hovering around $6.32 bbl, 
compared to $6.94 bbl at Friday's close.

   Market participants were also tracking signs of possible demand destruction 
and stunted economic growth amid growing inflationary pressures and soaring 
energy prices caused by the largest oil supply disruption in history. The 
second of three estimates for first quarter GDP growth is scheduled for release 
by the U.S. Bureau of Economic Analysis on Thursday (5/28). In April, BEA 
estimated the U.S. economy to have expanded by 2% in the first three months of 
the year after GDP growth slowed to 0.5% in 4Q2025.




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