Oil prices rise above $100 as U.S.-Iran ceasefire falters

3 min readUpdated May 12, 2026

Oil prices rose Tuesday after President Donald Trump declared Monday the U.S.-Iran ceasefire was on "massive life support," raising fresh doubts about whether the conflict in the Middle East will end soon. By mid-morning Tuesday, Brent crude was trading above $107 a barrel, up more than 3% on the day, with WTI not far behind at above $101 a barrel, also posting gains exceeding 3%. Monday had already seen each benchmark add roughly 3%.

Speaking to reporters Monday, Trump dismissed Tehran's latest counterproposal as "garbage," offering an outright rejection of the terms Iran had put forward. "I would say the ceasefire is on massive life support, where the doctor walks in and says, 'Sir, your loved one has approximately a 1% chance of living,'" he said. Among the sticking points, Reuters reported, are disagreements over war reparations, the status of a U.S. naval blockade, whether Iranian oil exports can resume, and a broader ceasefire across all active fronts.

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Tehran has continued to assert its claim over the Strait of Hormuz, a chokepoint that typically carries around one-fifth of the world's oil and LNG supply. Regional producers have been forced to scale back shipments as the effective blockage of the strait ripples through supply chains. With the strait still effectively closed, Aramco chief Amin Nasser cautioned on Monday that a return to normal market conditions may not arrive until 2027 if the blockage persists beyond mid-June. "If the Strait of Hormuz opens today, it will still take months for the market to rebalance, and if its opening is delayed by a few more weeks, then normalization will last into 2027," Nasser said on the company's first-quarter earnings call.

Speaking on CNBC's "Squawk Box Asia," Dragonfly chief intelligence officer Henry Wilkinson said the war could yet intensify, and suggested that when Trump sits down with Xi Jinping later this week, he may use the meeting to push Beijing into pressuring Tehran toward an agreement.

The two benchmarks have each surged more than 40% since fighting broke out on Feb. 28 under U.S. and Israeli leadership. In a research note, Citi cautioned that "Oil prices have been volatile and can rise further if US-Iran dealmaking remains thorny."

The price spike has fed through to American consumers. AAA data showed Tuesday's national average for a regular gallon at $4.50, a two-cent drop on the day, though pump prices remain 51% higher than they were at the war's outset.

The standoff reflects weeks of failed diplomacy. Trump rejected an earlier Iranian proposal on Sunday, calling the offer "TOTALLY UNACCEPTABLE!" and sending oil prices higher into Monday trading. That rejection came after a separate stretch of volatility the prior week, when reports of a near-deal sent crude tumbling by as much as 15% before prices partially recovered. A delegation that included Vice President JD Vance, special envoy Steve Witkoff, and Jared Kushner traveled to Islamabad last month for face-to-face discussions but returned without an agreement.

Investors are also watching Trump's planned visit to Beijing later this week, where trade tensions with China and pressure to facilitate a peace deal are both expected to be on the agenda.

Oil prices are holding above $100 as the U.S.-Iran ceasefire teeters

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