One analyst thinks the Hormuz situation will be settled by end-of-week: File Image/Pixabay.

While still 45 percent higher than prices a year ago, oil trading on Tuesday still resulted in two key benchmarks hovering somewhat lower than the $100 mark.

In advance of the U.S. scrapping Pakistan talks with Iran but U.S. president Donald Trump agreeing to extend the ceasefire until the Islamic republic presents a unified deal for peace, West Texas Intermediate settled up 2.8 percent at $92.13 per barrel.

Brent settled up 3.1 percent at $98.48 per barrel.

Brian Mulberry, chief market strategist at Zacks Investment Management, echoed the sentiments of many analysts by saying he expected issues surrounding control over the Strait of Hormuz to be “resolved by the end of this week,” and he justified his stance by adding that, “There is a long history with Iran that causes suspicion of any deal lasting but also their delegation may not be able to carry out much of a peace agreement given how fractured the top levels of their military and government are.”

Rory Johnston, founder of Commodity Context, said  any reopening of the strait would likely trigger an immediate drop of crude prices between $10 and $20 due to speculative positioning, but that relief would be temporary due to the cumulative effect of supply bottlenecks and infrastructure damage to Middle East oil production facilities.

As for oil consumption in the U.S., the American Petroleum Institute on Tuesday estimated that crude inventories fell by 4.4 million barrels in the week ending April 17, compared with expectations for a 1 million barrel draw; also during that time frame, 4.2 million barrels were drawn from the Strategic Petroleum Reserve to alleviate price pressures at the pump.

Gasoline inventories fell by 5.1 million barrels in the week ending April 17, placing them 1 percent above the five-year average for this time of year.

In other oil news on Tuesday, the trading house Mercuria predicted that China would likely resume buying large volumes of oil within three weeks after selling down inventories due to the Iran supply disruption.

China entered 2026 with a sizable buffer after stockpiling heavily throughout the previous year, but these barrels are rapidly being consumed, signalling the country's return as a large-scale buyer and adding demand to a constrained world market.