Brent oil prices surged 63% in March, the biggest monthly gain dating back to 1988 as the Iran war has triggered the largest supply disruption in history.Â
The global benchmark Brent contract for May rose about 5% on Tuesday to close at $118.35 per barrel. The June contract, however, fell 3.2%.
U.S. crude oil fell 1.46% to settle at $101.38 per barrel. West Texas Intermediate prices gained about 51% in March for its best month since May 2020.
U.S. crude and June Brent prices slipped on reports that President Donald Trump and Iran are open to ending the war.
"This is a nightmare," Bob McNally, president of Rapidan Energy, told CNBC. "The energy market has experienced a nightmare it never thought possible and it wants to believe the nightmare is over."
Trump told his aides that he was willing to end U.S. operations against Iran even if the Strait of Hormuz remained shut, administration officials told The Wall Street Journal. Unconfirmed reports also indicated that Iran's President Masoud Pezeshkian was open to ending the war.
Iran, meanwhile, attacked a Kuwaiti oil tanker anchored outside Dubai. No injuries were reported and no oil spill occurred, according to a statement from Kuwait Petroleum Corporation.
That attack indicates a further tightening of the Islamic Republic's grip on the Strait of Hormuz, targeting tankers just outside the waterway, said Ben Emons, CIO at FedWatch Advisors, highlighting renewed risks of further disruption to energy flows.
"The result is a more asymmetric game, with the U.S. leaning toward exit and Iran still incentivized to impose cost," Emons said.
Trump had earlier threatened to expand attacks to Iran's civilian energy infrastructure, including water desalination plants, if Tehran failed to reopen the Strait of Hormuz.
Trump said Monday that if Tehran didn't reopen the Strait of Hormuz and agree to a peace deal for ending the war, "we will conclude our lovely 'stay' in Iran by blowing up and completely obliterating" electricity plants, oil facilities, and "possibly" desalination infrastructure, according to a Truth Social post.
Trump has regularly vacillated between hailing talks with Iran as productive and warning that he's prepared to order more military forces to the region.
He told reporters on Monday that Tehran agreed to "most of" the 15-point ceasefire proposal put forth by the U.S. while Tehran has publicly rejected the terms and responded with conditions of its own, including maintaining control over the Strait of Hormuz.
Trump has also reportedly weighed the option of sending in ground forces to seize Kharg Island, a major fuel hub that facilitates 90% of Iran's crude exports.
Shipping traffic through the Hormuz waterway, which typically carried a fifth of global seaborne oil shipments before the conflict, has virtually ground to a halt since the war began on Feb. 28.
Experts warn that a potential ground operation to seize the Kharg Island could risk raising U.S. casualties and extending the war's cost and duration.