WTI crude oil futures pared earlier gains to trade near $90 per barrel on Tuesday afternoon, after having climbed as much as 5% earlier in the session. Prices initially surged after President Trump extended the US ceasefire with Iran, saying Tehran’s government was “seriously fractured.” He indicated that the truce would remain in effect until Iran’s leaders submit a “unified proposal” to end the war.
Earlier in the day, markets had largely priced in the view that US–Iran negotiations had stalled ahead of the looming ceasefire deadline. Vice President JD Vance had been scheduled to travel to Pakistan on Tuesday, but the trip was reportedly postponed after Iran failed to respond to US negotiating proposals.
The ongoing conflict continues to cloud the supply outlook. Current estimates put demand destruction at nearly 4 million barrels per day, with the potential to rise to 5 million barrels per day—around 5% of global supply—with Asia expected to absorb most of the impact.
