LONDON: Oil prices rebounded back to $100 on Tuesday while stock markets were mixed and the dollar firmed after US military strikes on Iran deflated hopes of an imminent deal to reopen the Strait of Hormuz.

The US and Iran have been working on an agreement to end the Middle East war and reopen the crucial waterway to tanker and cargo traffic since a fragile ceasefire on April 8.

But the fresh strikes had Tehran warning it was ready to retaliate after it accused Washington of breaching their truce with what US Central Command described as “self-defence strikes”.

Stock markets rallied on Monday and crude futures dropped below $100 a barrel after reports that a deal might come within days. That was before US forces said they had attacked missile sites in southern Iran and boats trying to lay mines.

Brent crosses $100 mark as Tehran warns of retaliation

Brent North Sea crude, the international benchmark, jumped almost 4.5pc on Tuesday to edge back above $100 a barrel, while US West Texas Intermediate crude fell 3pc to $93.72.

Oil price increases had been modest beforehand, “underlining the market’s strong belief that the Strait of Hormuz will reopen,” said Arne Lohmann Rasmussen, a commodities analyst at Global Risk Management. Equity markets were mixed with the Dow just off but the tech-heavy Nasdaq and the S&P 500 in the green two hours into trading.

In Europe, Frankfurt and Paris closed off around 1pc with London ending just 0.2pc ahead as traders returned after a long holiday weekend in Britain.

British oil giant BP topped the losers’ chart, off more than 4pc after it unexpectedly removed Albert Manifold as chairman only months into his tenure, citing “serious concerns” about governance standards, oversight and conduct at the company.

Kathleen Brooks, research director at XTB, warned that Manifold’s departure, coming barely three years after former CEO Bernard Looney was replaced over allegations of misconduct, “suggests a lack of stability at the firm, which is bad news for shareholders”.

AJ Bell investment director Russ Mould focused on the Iran situation as he noted that “continued doubts about the potential for a deal and an overnight pre-emptive US strike on Iran mean any euphoria is being kept in check,” his concerns echoed by Brooks.

In Asia, Seoul’s stock market hit a new record high above 8,000 points as chipmakers, carmakers and shipbuilders continued to outperform.

Published in Dawn, May 27th, 2026