US crude oil traded around $107.80 a barrel on Tuesday after mixed signals from the Trump administration rattled energy markets. Traders ignored the temporary suspension of some sanctions and refocused on the risk of widespread conflict in the Middle East.
The volatility highlights an asymmetric pattern in the formation of oil prices, where headlines about war cause more marked movements than diplomatic announcements. Analysts say this trend could keep inflation high and put pressure on global risk assets, including cryptos.
Oil reacts more quickly to conflict than to diplomacy
Jim Cramer, former hedge fund manager and presenter of Mad Money on CNBC, highlighted this imbalance and warned that the barrel of crude could return to its previous high of $119 if talks between Washington and Tehran fail.
“Here’s the real problem with oil: Lately, it doesn’t go down much when Trump mentions a glimmer of hope for peace, but it goes up a lot more whenever there is a rumor of war. So if there is no peace this time, oil could test its high at $119. All this carrot without the stick in negotiations only creates higher and higher prices,” Cramer wrote in a post.
Volatility increased after the Iranian Tasnim News agency mentioned a possible suspension of American sanctions on Iranian oil. This proposal is linked to the resumption of nuclear discussions.
This title briefly took crude below $105, before traders returned to this correction, recalling the fluctuations observed during recent rumors around the ceasefire in Iran.
Trump postpones strike on Iran, extends waivers for Russia
Oil prices fell about 1% after President Donald Trump postponed a strike against Iran. Trump also extended waivers for deliveries of Russian crude.
US Treasury Secretary Scott Bessent unveiled a 30-day blanket license on Russian oil shipments. This decree allows energy-dependent countries to temporarily access barrels currently blocked at sea.
Bessent said the policy aimed to stabilize physical flows of crude and limit massive stockpiling of discounted barrels by China.
“This extension will provide additional flexibility, and we will work with these countries to provide specific authorizations if necessary… It will also help redirect existing supply to countries that need it most, reducing China’s ability to hoard oil at cut prices “, said Bessent.
Despite these diplomatic initiatives, the modest 1% decline shows that traders continue to view supply risks as the key variable.
Why crypto holders are monitoring the situation
More expensive oil fuels inflation expectations and tightens financial conditions, which may push back any rate cuts by the Federal Reserve. This context generally reduces the appetite for risky assets like Bitcoin and altcoins.
Energy-related inflation is now a major macroeconomic theme for 2026, particularly as disruptions near the Strait of Hormuz limit oil tanker traffic.
Three main catalysts dominate the short-term watchlist:
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Negotiations between the United States and Iran
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Possible additional actions on sanctions, and
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Any military developments affecting navigation in the Middle East.
If diplomatic talks stall, traders anticipate continued volatility in oil, and a prolonged energy shock could lead to tighter liquidity and increased volatility in digital assets through the summer.
Read the original article The oil market judges the risk of war real despite the peace announcements by Lockridge Okoth on fr.beincrypto.com
/2026/05/19/6a0c417e994d8710907673.jpg "War in the Middle East: Israel is not opposed to a resumption of the conflict and new strikes in Iran")
