Brent crude prices climbed back above $100 per barrel after a sharp drop earlier in the week, as uncertainty grew over whether the United States and Iran are actually in discussions.

Oil had fallen on Monday after US President Donald Trump announced a delay in planned strikes on Iranian energy facilities. He later claimed on his Truth Social platform that Washington and Tehran had engaged in constructive talks.

Iranian officials, however, denied any such communication, accusing the US of trying to influence global markets.

Tensions had already escalated over the weekend when Trump warned that Iranian power plants would be destroyed if the Strait of Hormuz was not reopened within 48 hours. Iran responded by threatening to target key infrastructure across the region. These statements pushed Brent prices as high as $113 per barrel.

Markets shifted again on Monday after Trump said military action would be paused, citing what he described as progress toward a “complete and total” resolution with Iran. That announcement triggered a drop in oil prices and a rebound in stock markets.

Energy markets have remained highly volatile since the US and Israel launched strikes on Iran on 28 February. By Tuesday, oil prices had recovered to around $104 per barrel.

Asian stock markets, which have been particularly sensitive due to their reliance on energy imports through the Strait of Hormuz, showed signs of stability. Japan’s Nikkei 225 rose by 0.8%, Hong Kong’s Hang Seng gained 1.6%, and South Korea’s Kospi increased by 2.2%, following sharp losses a day earlier.

European markets were more subdued, with the UK’s FTSE 100 and Germany’s DAX initially slipping before regaining ground later in the day. In the US, the S&P 500 also opened lower but recovered shortly afterward.

More than three weeks into the conflict, UK businesses are facing their steepest rise in input costs since 1992, according to the S&P Global Purchasing Managers’ Index.

Since fighting began, Iran has effectively blocked the Strait of Hormuz, a critical route that typically carries about 20% of the world’s oil and liquefied natural gas. The disruption has driven global energy prices sharply higher.

Governments worldwide have taken steps to limit the economic impact. The United States has temporarily eased sanctions on Russian and Iranian oil shipments already at sea to help stabilize supply.

Meanwhile, China has scaled back planned fuel price increases in an effort to reduce pressure on consumers as energy costs continue to climb.