Oil Falls, Signals US-Iran Talks Hold Hormuz Blockade Premium
Oil prices weakened in recent trading on signs that Washington and Tehran may revive talks, despite the US blockade of the Strait of Hormuz. Brent fell slightly to around $98 per barrel, while WTI hovered near $96, with market participants monitoring Chinese-linked vessels that could potentially test the new restrictions.
Iran is reportedly considering temporarily halting oil shipments through Hormuz to avoid a “test of strength” against the US blockade that could derail the next round of talks. The move is seen as a short-term effort to de-escalate tensions and preserve diplomatic space.
Sources said the two sides discussed holding another round of face-to-face negotiations to push for a long-term ceasefire. The goal is to arrange a deal before the two-week pause in hostilities announced on April 7 ends next week, and Reuters reported that negotiating teams could return to Pakistan this week.
On the demand side, the International Energy Agency (IEA) warned that the conflict risks wiping out oil demand growth this year, which would be the first annual decline since the pandemic. The IEA chief also assessed that current prices do not fully reflect the scale of the crisis, which he described as unprecedented.
On the supply side, the war has damaged energy infrastructure, and Iran previously cut off Hormuz traffic, triggering a supply shock. On Monday, the US increased pressure by blocking ships from entering and leaving ports in the Persian Gulf and Iran's coastal areas, making it difficult for the market to assess whether energy flows will recover quickly.
Developments at sea also provide a barometer: tracking data showed a tanker sanctioned by the US and linked to China appeared to turn around after passing through the strait, a test of the new US stance, although it was unclear whether the ship called at an Iranian port or was carrying cargo. Meanwhile, Saudi Arabia reportedly urged the US to lift the blockade and return to negotiations, fearing it would disrupt other vital shipping lanes. Energy inflation pressures also persist, with US gasoline and diesel prices briefly rising to their highest levels since 2022, and jet fuel and diesel in Europe soaring to record highs approaching above $200 per barrel. (gn)*
Source: Newsmaker.id
