EMEA crude futures advanced in after-hours trading on Tuesday as President Trump cast doubt over the ceasefire with Iran after rejecting Tehran's latest peace offer, stoking further global supply disruption and prolonging the near closure of the Strait of Hormuz.
Brent crude futures gained 3.31% to $107.66 per barrel, while Murban oil futures were up 2.12% to $105.80/bbl.
"Oil prices are extending gains today as markets react to renewed uncertainty around US-Iran negotiations and the broader Middle East conflict," Liquidity Energy strategists said on Tuesday.
President Trump said on Monday that the US-Iran ceasefire was on "massive life support", citing disagreements over Tehran's demands for an end to hostilities on all fronts, the removal of a US naval blockade, the resumption of Iranian oil sales, and compensation for war damage.
Trump reportedly said, "It's just a question of time" with Iran, a day after the US President rebuffed Tehran's offer as "garbage" and warned that the ceasefire is on life support.
Soojin Kim, research analyst at MUFG, said crude prices rose after Trump cast doubt on the durability of the ceasefire with Iran, prolonging uncertainty over Hormuz and global energy supplies.
Fueling bullish sentiment, the effective closure halt of the Hormuz has significantly disrupted global supplies of crude, natural gas, and fuels, stoking fears of reignited inflation.
Aramco CEO Amin Nasser reportedly said on Monday that disruptions to oil exports via the Strait could delay a return to market stability until 2027, resulting in a loss of about 100 million barrels of oil per week.
Daniel Hynes, senior commodity strategist at ANZ, said Trump is considering renewing "Project Freedom", aimed at guiding vessels through the Strait.
"The first attempt triggered attacks by Iranian forces on a US military vessel and the UAE's key oil export facility at Fujairah," Hynes said.
On the supply front, disruptions to crude oil production in the Middle East have surged since April, with major Gulf producers collectively shutting in about 10.5 million barrels per day, according to the US Energy Information Administration's latest Short-Term Energy Outlook.
The EIA said Iraq, Saudi Arabia, Kuwait, the UAE, Qatar, and Bahrain have all curtailed output amid the ongoing Middle East conflict, with the Hormuz assumed to remain effectively closed until late May.
The agency now projects global crude inventories to fall by an average of 8.5 million barrels per day in Q2, while prices will average $89 per barrel by Q4.