Oil prices surged on Tuesday, with Brent crude rising above $110 per barrel, amid growing concerns over a stalemate in reopening the strategically important Strait of Hormuz. The waterway, which serves as a critical chokepoint for global oil shipments, has remained closed for two months, contributing to heightened market uncertainty.

Brent crude for June delivery increased 2.8 percent, settling at $111.26 per barrel, while the U.S. benchmark West Texas Intermediate (WTI) for June delivery rose 3.4 percent to $99.62 per barrel. The uptick followed a breakdown in diplomatic efforts between the United States and Iran, with negotiations to end the dispute and reopen the strait appearing to falter.

The White House declined to indicate whether President Donald Trump would consider Iran’s latest proposals aimed at resolving the conflict. Iran’s suggestion reportedly includes deferring discussions on Tehran’s nuclear program, a key sticking point that has delayed progress. Earlier optimism about a possible breakthrough was dampened after Trump canceled a planned visit by his envoys Steve Witkoff and Jared Kushner to Islamabad over the weekend, signaling a setback in diplomatic channels.

Market analysts pointed to the low likelihood of an imminent agreement. Kathleen Brooks, research director at the XTB trading platform, noted that the market’s sentiment has turned pessimistic due to Iran’s insistence on postponing nuclear disarmament talks, reducing hopes of a swift resolution.

The situation has raised concerns about a “frozen conflict” in the Gulf region, a possibility highlighted by Qatar on Tuesday as it cautioned against prolonged stalemate effects on regional stability. This ongoing impasse contributes to fears of sustained disruptions to oil flows through the Strait of Hormuz, which handles roughly one-fifth of the world’s petroleum.

Compounding the market dynamics, the United Arab Emirates announced it would withdraw from both OPEC and the OPEC+ oil production agreements effective May 1. The UAE described the move as a strategic decision by the major oil producer. Industry analysts view this as a significant development, given the UAE’s status alongside Saudi Arabia as one of the few OPEC members with substantial spare production capacity.

Jorge Leon, an analyst at Rystad Energy, said the UAE’s departure could have long-term consequences, contributing to a structurally weaker OPEC that might result in increased market volatility. While immediate impacts may be limited due to existing disruptions in the Gulf, the shift signals potential challenges for the collective oil supply management framework in the future.

Meanwhile, broader investor sentiment turned cautious as technology stocks experienced declines and market participants focused on upcoming corporate earnings and interest rate outlooks. The geopolitical uncertainty and OPEC realignments continue to weigh on global energy markets as stakeholders await further diplomatic and economic developments.