Oil prices pared earlier gains after the United Arab Emirates said it would leave OPEC and OPEC+, easing some supply concerns, though prices held near the upper end of a nearly three per cent rally as stalled efforts to end the Iran war kept the Strait of Hormuz largely closed and constrained Middle East supplies.
Brent crude futures for June climbed $2.93, or 2.7 per cent, to $111.16 a barrel at 11:52 ET or 15:32 GMT. The contract was on track for a seventh consecutive day of gains.
US West Texas Intermediate (WTI) crude for June rose $3.49, or 3.6 per cent, to $99.86 a barrel, after briefly trading above $100 for the first time since April 13.
Prices trimmed some advances after the United Arab Emirates said on Tuesday that it had exited OPEC and OPEC+, dealing a blow to the oil-exporting groups and their de facto leader, Saudi Arabia.
"In normal times, this would have been very bearish news for the oil market and sparked a sizable selloff," said John Kilduff, partner at Again Capital. He estimated the UAE could quickly add between one and 1.5 million barrels per day of output.
"But with the Strait of Hormuz effectively closed, there's nowhere for that supply to go...so we're likely to see oil prices continue their slow march higher."
US President Donald Trump, meanwhile, was unhappy with the latest Iranian proposal to end the war, a US official said on Monday, as Iranian sources disclosed that it avoided addressing the nuclear programme until hostilities cease and Persian Gulf shipping disputes are resolved.
Trump's displeasure with the offer leaves the conflict deadlocked, with Iran shutting shipping flows through the strait, a conduit for about 20 per cent of global oil and liquefied natural gas supplies, and the US retaining its blockade of Iranian ports.
"With peace talks stalled and no clear path to reopening the Strait of Hormuz, traders are factoring in a prolonged disruption to a critical artery of global supply," said Rystad Energy analyst Jorge Leon.
"Even in a best-case scenario, any US–Iran agreement is likely to be narrow and partial, leaving the strait issue unresolved, which means the upside risks to prices remain."
An earlier round of negotiations between the United States and Iran collapsed last week after face-to-face talks failed.
Ship-tracking data showed significant disruptions in the region, with six Iranian oil tankers forced to turn back due to the US blockade, but some traffic is still moving.
The amount of crude oil held around the world on tankers that have been stationary for at least seven days rose to 153.11 million barrels as of April 24, Vortexa data shows. That figure is the highest since January, and up 25 per cent from 122.60 million on April 17.
A Panama-flagged tanker, Idemitsu Maru, carrying two million barrels of Saudi oil crossed the Strait of Hormuz on Tuesday, shipping data showed, and an LNG tanker managed by the United Arab Emirates' Abu Dhabi National Oil Company crossed the strait on Monday.
Prior to the US-Israeli war on Iran, which began on February 28, between 125 and 140 vessels transited the strait daily.
Energy prices are expected to surge by 24 per cent in 2026 to their highest level since Russia's full-scale invasion of Ukraine four years ago, if the most acute disruptions caused by the war in the Middle East end in May, the World Bank said on Tuesday.
The bank said its baseline scenario assumed that shipping volumes through the Strait of Hormuz would gradually return to near pre-war levels by October, but said the risks were "markedly tilted" towards higher prices.
In the US, a fire that broke out at Shell's Norco 231,827 barrel-per-day refinery in Louisiana on Monday evening has been extinguished, a company spokesperson said on Tuesday, though it wasn't immediately clear whether operations had resumed.
And China is poised to resume exporting jet fuel, gasoline and diesel to mostly Asian countries with the country's large state oil companies having applied for export permits to ship fuel in May, the Financial Times reported on Tuesday, citing trading sources.
(Reporting by Siddharth Cavale in New York, Robert Harvey in London, Anmol Choubey in Bengaluru and Trixie Yap in Singapore; Editing by Louise Heavens, Joe Bavier, Ros Russell)
