Oil Drops, US-Iran Open for Talks?
Oil prices weakened after signs emerged that Washington and Tehran could revive peace talks, even though the US blockade of the Strait of Hormuz has already been put in place. West Texas Intermediate (WTI) fell to US$96 per barrel, while Brent hovered around US$99, reflecting a market weighing supply risks versus the chances of de-escalation.
Sources familiar with the discussions said the US and Iran are discussing further negotiations toward a long-term ceasefire. The goal is to hold talks before the two-week ceasefire announced on April 7 expires, allowing the market to once again test whether diplomacy can prevent further escalation.
From Washington, President Donald Trump said Iran has contacted his government and "wants to make a deal." From Tehran, President Masoud Pezeshkian stated that Iran is ready to resume peace talks within the framework of international law and regulations. These signals helped limit the risk premium on oil, even though the conflict has entered its seventh week and continues to pressure energy markets.
However, supply risks remain high as the US–Israel–Iran war has triggered major supply shocks: energy infrastructure has been affected, and Hormuz traffic has been disrupted by Iran's tightening. On Monday, the US increased pressure by blocking ships heading to and from Iranian ports in the Persian Gulf, raising uncertainty about export flows in the region.
Vice President J.D. Vance, who led the US delegation to the failed Pakistan talks last weekend, said the blockade increases US leverage against Iran, while acknowledging the impact of rising gasoline prices on US consumers—said to be at their highest level since 2022. He said the US believes it has "achieved its goal" and "can begin to reduce the intensity."
The market is now awaiting further fundamental signals, including the IEA's Oil Market Report, scheduled for release on Tuesday, to update the supply-demand picture. IEA Chief Fatih Birol said current oil prices do not yet fully reflect the severity of the supply crisis, but will soon. OPEC data also showed OPEC crude output fell sharply last month as the conflict pressured exports from key members.
5 Key Points:
- Oil weakens as the prospect of renewed US–Iran talks emerges despite the ongoing blockade.
- WTI fell to US$96, Brent around US$99.
- The US and Iran are reportedly preparing for further negotiations before the two-week ceasefire ends (April 7).
- The US blockade targets ships to and from Iranian ports, maintaining supply risks and high volatility.
- The market awaits the IEA's monthly report; Birol believes prices do not yet fully reflect the supply crisis. (asd)
Source: Newsmaker.id
