Oil prices are holding steady at $87 per barrel as investors adopt a cautious stance, monitoring developments in US-Iran tensions and efforts to reopen the Strait of Hormuz.
Markets remain on edge as negotiations between Washington and Tehran show little meaningful progress, with traders closely watching any signals that could shift the balance of power over the vital shipping lane.
Iran has dealt a significant blow to peace optimism after a senior regime official suggested the country could deliberately drag out its conflict with the United States until Donald Trump leaves office.
Mohammad Reza Naghdi, senior adviser to the commander of Iran’s Revolutionary Guards, stated that prolonging the war would send a message to future US administrations that “there is a cost” to hostile advances against Iran.
“We have to attain deterrence so that the enemy never dares to attack us, so we can live with security,” Naghdi said during an appearance on PBS NewsHour.
The remarks deepen an already fraught standoff between the two nations over control of the Strait of Hormuz, a narrow waterway critical to global oil supply chains.
Trump has claimed the US has “total control” over the strait, while Tehran insists it has the passage “blocked” and will not reopen it until Iran’s conditions are accepted.
Earlier in the week, Trump declared that “praise be to Allah”, Washington has “total control over the Strait of Hormuz”, adding: “I THINK WE WILL KEEP IT!”
David Morrison, senior market analyst at Trade Nation, said: “While US-Iran peace efforts remained stalled and disruption around the Strait of Hormuz persisted, the focus for oil traders has shifted towards talk of slowing demand growth.”
The International Energy Agency, the global energy watchdog, has warned that oil stockpiles were “rapidly depleting” as progress to reopen the strait continues to stall, adding further uncertainty to already fragile markets.
With geopolitical risk remaining elevated, traders are now weighing both supply disruption concerns and a growing narrative around weakening global demand, creating a complex backdrop for energy markets heading into the summer months.
The combination of unresolved conflict and slowing demand signals is keeping oil investors in a holding pattern, with few willing to make decisive moves until negotiations produce a credible breakthrough.