Oil Prices Rise as Trump Signals Iran Ceasefire Deal in Jeopardy

Oil prices rose Tuesday as U.S. President Donald Trump indicated that the ceasefire with Iran was in serious jeopardy, stating he rejected Tehran's counterproposal to end the conflict and describing its status as "on massive life support."

International benchmark Brent crude futures for July gained 3.2% to $107.58 a barrel, and U.S. West Texas Intermediate (WTI) futures for June rose 3.3% to $101.37 per barrel.

Trump told reporters that Iran's counterproposal was "garbage" and the ceasefire's state was "unbelievably weak," comparing its chances of survival to "approximately a 1% chance of living."

Since the U.S. and Israeli-led war against Iran began on February 28, both WTI and Brent crude prices have increased by more than 40%. Citi analysts noted in a research note that oil prices remain volatile and could climb further if U.S.-Iran dealmaking continues to be challenging.

Henry Wilkinson, chief intelligence officer at geopolitical and security intelligence service firm Dragonfly, told CNBC on Tuesday that a re-escalation of the conflict is possible. He suggested that Trump might ask Chinese President Xi Jinping to urge Iran to accept U.S. terms during upcoming U.S.-China talks.

Saudi Aramco CEO Amin Nasser warned Monday that the oil market may not normalize until 2027 if the Strait of Hormuz remains blocked beyond mid-June. Nasser, heading the world's largest oil company, informed investors during the company's first-quarter earnings call that even if the Strait of Hormuz opens immediately, market rebalancing would still take months, and delays would push normalization into 2027.

Reporting by Kevin Breuninger and Spencer Kimball for CNBC.