Oil Prices Rebound as Unclear US-Iran Peace Deal Keeps Markets on Edge

KUALA LUMPUR, June 2026 — Oil prices moved higher again on Tuesday as investors remained cautious over the lack of clear details in the preliminary agreement aimed at ending the conflict between the United States and Iran.

According to Astro Awani, Brent crude futures rose 26 cents, or 0.3%, to US$83.42 per barrel, while US West Texas Intermediate, or WTI, increased 46 cents, or 0.3%, to US$81.12 per barrel as of 9am Malaysian time.

The rebound came after oil prices had fallen sharply on Monday, when crude dropped nearly 5% to its lowest closing level since March 4. The decline followed US President Donald Trump’s announcement that a memorandum of understanding had been signed to end the US-Israel war with Iran.

However, market optimism was limited because the full terms of the agreement have not been made public. Traders are still waiting for clearer information on the ceasefire, the reopening of the Strait of Hormuz and the timeline for restoring disrupted oil supply.

The Strait of Hormuz remains central to the market reaction. The waterway had carried around one-fifth of the world’s oil supply before the conflict, making any disruption a major risk for global energy markets.

Astro Awani reported that the conflict had led to the closure of the Strait of Hormuz and caused around 14 million barrels per day of production to be halted. This disruption had previously pushed crude prices higher as traders feared a prolonged supply shock.

Early signs suggest that the US-Iran deal could reopen the blocked Strait of Hormuz and extend a ceasefire for 60 days, allowing negotiators to discuss more difficult issues, including the future of Iran’s nuclear programme.

Even so, analysts warned that the return of oil supply may not happen immediately. Morgan Stanley analysts said it could take several weeks for tanker flows through the Strait of Hormuz to be restored, with production expected to recover gradually rather than all at once.

Reuters reported that Morgan Stanley expects 50% of production to return by September and 80% by December, slightly faster than earlier estimates. However, the pace of recovery still depends on whether shipping lanes, insurance coverage and port access can normalise safely.

The uncertainty has kept oil prices volatile. While the peace agreement raised hopes that supply disruption could ease, the absence of a final truce and clear implementation plan has prevented a deeper sell-off in crude prices.

Iranian President Masoud Pezeshkian described the US-Iran pact as an important step toward stopping the fighting, but also warned that a final agreement for a lasting truce had not yet fully taken shape.

A senior Iranian official also said Iran would freeze its nuclear activity while waiting for a final agreement. This includes refraining from further uranium enrichment or expanding nuclear facilities, although the full scope of the commitment remains unclear.

For oil traders, the main concern is whether the deal can produce a smooth and simultaneous reopening of supply routes. DBS Bank’s head of energy research, Suvro Sarkar, said any outcome other than a clean and coordinated reopening could trigger renewed volatility in oil prices.

The market is also watching whether the US naval blockade on Iranian ports and vessels will be lifted in stages or removed quickly. This will be important in determining how much Iranian and Gulf supply can return to international markets.

At the same time, weak physical oil market indicators are limiting stronger price gains. Reuters reported that high US exports and low Chinese crude imports have been weighing on the market, with China’s crude imports falling sharply in May.

This creates a mixed outlook for crude. On one side, geopolitical uncertainty and unclear peace terms are supporting prices. On the other side, expectations of returning supply and weaker demand signals are preventing a sustained rally.

The latest movement also shows how sensitive energy markets remain to developments in the Middle East. Any delay in reopening the Strait of Hormuz, renewed fighting, or disagreement over Iran’s nuclear programme could quickly push prices higher again.

For oil-importing countries, including many Asian economies, price volatility remains a concern because higher crude prices can increase transport costs, fuel subsidies, inflation pressure and business operating expenses.

For now, the market is likely to remain focused on three key issues: the final terms of the US-Iran peace deal, the actual timeline for reopening the Strait of Hormuz and whether disrupted oil supply can return without new security risks.

oil prices rebounded as investors questioned whether the preliminary US-Iran deal is strong enough to restore market confidence. Until the ceasefire is finalised and supply routes reopen clearly, crude prices are expected to remain volatile.