By Scott DiSavino
NEW YORK, June 2 (Reuters) – Oil prices were little changed in volatile trade on Tuesday as the market waited for news on the war in the Middle East as Iran reviewed a proposed agreement with the United States to halt the war.
Brent futures were up 17 cents or 0.2% to $95.15 a barrel at 10:19 a.m. EDT (1419 GMT), while U.S. West Texas Intermediate (WTI) crude rose 5 cents, or 0.1% to $92.21. Earlier in the session, both contracts were down over $2.
Iran is reviewing a proposed agreement with the U.S. to halt their war but has not communicated with Washington for a few days, Iranian media reported on Tuesday, after U.S. President Donald Trump said negotiations were ongoing.
“The market is currently focused on whether there’s any concrete progress or setbacks in U.S.-Iran negotiations, the tone and substance of statements from both sides (particularly Iran’s threats regarding the Strait of Hormuz), and actual physical tanker movements through the waterway,” said Tim Waterer, chief market analyst at KCM Trade.
More than three months after the U.S. and Israel launched strikes against Iran, the conflict has morphed into a stalemate with the pivotal Strait of Hormuz largely shut.
Iran has effectively halted most non-Iranian shipping in and out of the Gulf since the war began, choking off about a fifth of global oil and liquefied natural gas flows and driving prices up by 50% or more. The U.S. has also maintained a blockade on Iranian ports.
The semi-official Fars agency, also citing a source, said that messages on the possible deal, or memorandum of understanding, had stopped a few days ago, with the last one being Tehran’s “clear message” over Lebanon, where Iran is seeking a stop to Israel’s incursion against its ally Hezbollah.
Trump said on Monday that negotiations were continuing and there would be a deal over the next week to extend a ceasefire agreed to in early April and reopen the strait.
Israel, meanwhile, kept up strikes on southern Lebanon on Tuesday, pressing its campaign against Hezbollah a day after Trump asked Israeli Prime Minister Benjamin Netanyahu not to attack Beirut to avert further escalation in the three-month-old war.
GLOBAL STOCKPILES FALLING
Global oil inventories could hit critical or historically low levels just ahead of the peak summer demand period if stock draws continue at their current pace, the head of the International Energy Agency’s oil industry and markets division said on Tuesday.
An executive from Abu Dhabi’s state oil company also said on Tuesday that August could mark a tipping point for much higher oil prices if demand picks up and the Iran war supply crisis persists.
In the U.S., oil traders waited for weekly storage reports from the American Petroleum Institute (API) trade group later on Tuesday and the U.S. Energy Information Administration (EIA) on Wednesday.
Analysts estimated energy firms pulled 3.6 million barrels of crude from storage during the week ended May 29.
If correct, that would be the first time energy firms pulled crude out of storage for six weeks in a row since January 2025. It compares with a decrease of 4.3 million barrels in the same week last year and an average decline of 2.7 million barrels over the past five years (2021 to 2025). [EIA/S] [API/S]
(Reporting by Scott DiSavino in New York, Stephanie Kelly in London, Pooja Menon in Bengaluru and Siyi Liu in Singapore; Editing by Jan Harvey, Emelia Sithole-Matarise, Keith Weir and Andrea Ricci )