Uncertainty in US-Iran negotiations causes a sharp rise in international oil prices

International oil prices surged sharply for two consecutive days as uncertainty about US-Iran negotiations increased. With worries intensifying that the situation in the Middle East may once again turn tense, the possibility that crude oil supply could be disrupted has pushed prices higher.

On the 21st, Eastern Time in the United States, the price of West Texas Intermediate crude oil for May delivery on the New York Mercantile Exchange rose $2.52 from the previous close, a 2.81% increase, closing at $92.13 per barrel. After jumping 6.87% the day before, it again expanded its gains. During the trading session, it briefly surged to $94.45 per barrel. Recent oil price movements show that they respond more sensitively to geopolitical risks—such as the likelihood of military conflict or a diplomatic breakdown in oil-producing regions—than to simple supply-and-demand variables.

The direct factor driving market tension is the rapid deterioration in the outlook for US-Iran negotiations. On that day, before the New York market opened, U.S. President Donald Trump gave an interview to CNBC, drawing a clear line on the possibility of extending a ceasefire and saying there was little time left. He then mentioned that if negotiations broke down, expected bombings would follow, and added pressure by stating that the military was ready to act immediately. These remarks were interpreted as a signal highlighting the possibility of conflict rather than a sign that an agreement would be reached, immediately stoking supply concerns in the crude oil market.

Iran also did not show an active posture toward participating in the follow-up talks. Iranian Foreign Ministry spokesperson Esmail Bagheri said that no final decision had yet been made and pointed out that the issue lies in the contradictory information from the United States and its inconsistent actions. Aatullah Tarar, Pakistan’s Minister of Information Broadcasting and a mediator, also said that they are waiting for Iran’s formal response on whether it will attend the Islamabad peace talks. In addition, U.S. media outlets Axios and The New York Times reported that a U.S. negotiating delegation led by Vice President JD Vance has postponed its trip to Pakistan. There are even reports that Middle East special envoy Steve Witkoff and Jared Kushner remain in the United States, which further dampens expectations that actual negotiations will soon be on the table.

Behind the surge in oil prices, besides short-term news, there is also an implied concern that supply disruption could become prolonged. Tadawul’s chief economist, Sad Rahim, diagnosed that the current scale of supply shocks is too large and that the market has not yet fully reflected it. He predicts that even if a peace agreement is reached, the blocked supplies will not immediately return to normal. This means that ultimately the market cares more about how quickly actual oil production and exports can resume than about whether the negotiations succeed or fail. This trend also suggests that, over the coming period, the international oil price may remain highly volatile, depending on the diplomatic schedule between the U.S. and Iran, the moves of mediators, and the level of military tension in the Middle East.