Oil jumps 4% as Iran denies US talks, tensions flare again

International oil prices traded around 4% higher on Tuesday morning after a fall in the previous session, as Iran denied talks with the US government to end the ongoing war in West Asia.

At 8:05 AM, the May contract of Brent crude on the Intercontinental Exchange was trading at $103.98 per barrel, higher by 4.04% from its previous close. Similarly, the May contract of West Texas Intermediate rose 3.87% to $91.42 a barrel.

US President Donald Trump on Monday announced a five-day halt in strikes on Iranian power and energy infrastructure due to ongoing “in depth” and “progressive” talks with Iran, which he said would continue during the week—triggering a roughly 7% fall in oil prices earlier.

However, Tehran denied the claim, and the Iran Revolutionary Guard Corps launched fresh attacks on US targets in the region, reigniting concerns.

On Monday evening (India time), Trump posted on the social media platform Truth Social saying: “I am pleased to report that the United States of America, and the country of Iran, have had, over the last two days, very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East.”

"Based on the tenor and tone of these in depth, detailed, and constructive conversations, which will continue throughout the week, I have instructed the department of war to postpone any and all military strikes against Iranian power plants and energy infrastructure for a five day period, subject to the success of the ongoing meetings and discussions. Thank you for your attention to this matter! President Donald J. Trump," he said.

The announcement marked a reversal from earlier threats to target Iranian power plants if the country attempted to block the Strait of Hormuz, a key channel for about 20% of global oil and gas trade.

Conflicting signals

Later on Monday evening, Iranian media rejected the US president’s claims. Fars News Agency reported that there had been no direct or indirect communication with the United States.

Iran’s parliamentary speaker Mohammad Baqer Qalibaf, who was seen as representing Iran in any potential talks, also said on social media that no discussions had taken place with the US.

The conflicting signals from both sides have heightened uncertainty in oil markets, which have remained highly sensitive to geopolitical developments since the conflict escalated.

India watch

The Strait of Hormuz is critical for both global and Indian energy security, with a significant share of India’s oil, liquefied natural gas (LNG) and liquefied petroleum gas (LPG) imports passing through the route.

Speaking in the Lok Sabha on Monday, Prime Minister Narendra Modi said the government is closely monitoring developments and working to ensure supply continuity.

"The government of India is keeping a close watch on shipping routes in the Gulf and surrounding areas. Our aim is to ensure that ships carrying oil, gas, fertilizers, and other essential goods reach India safely. We are in continuous dialogue with all our global partners to keep our maritime corridors secure. As a result of these efforts, several of our ships stuck in the Strait of Hormuz have recently reached India safely," Modi said.

India risk

India imports nearly 90% of its crude oil requirements, making it highly vulnerable to global price shocks and supply disruptions.

Any sustained rise in crude prices has a direct fiscal and inflationary impact. Analysts estimate that every $1 per barrel increase in crude prices adds roughly ₹16,000 crore to India’s annual import bill.

The risks are already visible across segments. LPG supplies have emerged as a pressure point, with disruptions in West Asia affecting availability and pricing. Fertilizer production—dependent on natural gas as a key feedstock—also faces potential strain.