Oil prices remained above $110 per barrel on Tuesday as markets balanced news of a tanker fire near Dubai with reports that U.S. President Donald Trump may be considering ending military operations against Iran.
By 04:49 ET (08:49 GMT), Brent crude futures for May delivery, the global benchmark, were up 0.1% at $112.87 per barrel, while West Texas Intermediate (WTI) crude futures slipped 0.4% to $102.49 per barrel.
Crude initially surged earlier in the session after a Kuwaiti oil tanker caught fire near the port of Dubai. The vessel’s owner said the blaze was caused by an Iranian attack.
Prices later eased somewhat following a report from the Wall Street Journal stating that Trump had told advisers he could be willing to wind down the military campaign against Iran even if the Strait of Hormuz remains closed. According to the report, Trump and his team concluded that a mission to reopen the key waterway would likely extend well beyond his initial four-to-six-week timeline for the conflict.
Instead, the U.S. administration may look to scale back military operations after reaching core objectives, including weakening Iran’s naval forces and reducing its missile capabilities. Washington would then attempt to pressure Tehran through diplomatic channels to reopen the strait and could also encourage European and Gulf allies to lead those efforts, the report said.
A reduction in U.S. military activity in Iran could signal some movement toward de-escalation, particularly as Tehran has previously demanded such steps before entering direct negotiations with Washington.
However, a prolonged shutdown of the Strait of Hormuz would likely continue to disrupt global oil supplies, as roughly 20% of the world’s crude flows through the strategic passage.
Oil set for one of its biggest monthly gains on record
Both Brent and WTI were on track for a dramatic rise in March, with prices set to increase between 50% and 54%, marking one of the largest monthly rallies in crude markets.
The surge reflects mounting risk premiums and fears of supply disruptions linked to the Iran conflict. Tehran has effectively blocked the Strait of Hormuz while also targeting oil tankers and energy infrastructure in countries across the Persian Gulf, heightening concerns about prolonged supply shortages.
Several Gulf states have temporarily suspended oil production and shipments during the past month as the conflict escalated.
Mixed signals surrounding the war have also contributed to volatility in crude markets. Iranian officials have repeatedly said that no direct negotiations with the United States have taken place since the conflict began, contradicting statements from Washington suggesting talks were progressing.
Meanwhile, the United States has reportedly deployed thousands of additional troops to the Middle East. President Trump has also reiterated threats to strike Iran’s energy facilities and potentially water infrastructure if the Strait of Hormuz is not reopened by April 6.
Diplomatic efforts to resolve the conflict are ongoing, with Pakistan offering to host regional ceasefire talks in Islamabad.
Over the weekend, Yemen’s Iran-aligned Houthi movement entered the conflict, launching attacks against Israel and raising fears of a broader regional escalation, particularly given the group’s ability to target vessels traveling through the Red Sea.