Oil prices jumped on Tuesday, erasing all ceasefire losses on reports President Trump will publicly reject a peace plan offered by Iran while the UAE said it will leave the OPEC cartel in May, dealing a major blow to the oil bloc.
Futures on Brent crude (BZ=F), the international benchmark, gained roughly 3.1% to trade above $111 per barrel, per Bloomberg data, climbing north of its roughly $110 mark seen on April 7 just before President Trump announced the US’s initial two-week ceasefire with Iran.
In the US, benchmark West Texas Intermediate crude (CL=F) futures picked up 3.6% to trade just under $100 per barrel after briefly crossing the mark earlier in the session, still below pre-ceasefire levels.
President Trump is reportedly set to formally reject a peace plan put forward by Iran that would see the Strait of Hormuz opened and the conflict ended, while pushing negotiations over the country’s nuclear program down the road.
The status of Tehran’s nuclear enrichment capabilities has been a red line for the Trump administration, and a key justification for the US’s decision to begin strikes on Iran alongside Israel in late February.
In a Truth Social post on Tuesday morning, President Trump said Iran had told the White House the regime is “in a state of crisis,” and that Tehran wants the US to end its naval blockade of the Strait of Hormuz “as soon as possible.” The comments from the president mark his first substantive public statement on the war since the White House canceled travel plans for US negotiators led by Vice President JD Vance to revisit Pakistan last weekend.
Read more: How to protect your money as Mideast turmoil fuels market volatility
The Middle East and broader global energy market were further shaken by the news this morning that the UAE will leave the OPEC cartel in May, according to state news agency WAM, dealing a major blow to the oil bloc and taking with it roughly 12% of the group’s oil production.
The decision “reflects the UAE’s long-term strategic and economic vision and evolving energy profile,” WAM wrote on Tuesday, based on “our national interest and our commitment to contributing effectively to meeting the market’s pressing needs.”
Driving the decision, UAE leaders told Bloomberg, is a belief that responding to market needs after the war in Iran and ensuing crisis in the Strait of Hormuz comes to an end will require the ability to make independent decisions without the constraint of production limits and other measures imposed by the bloc on OPEC members.
