Oil Prices Drop, Market Heeds Signs Iran Will Attend US Talks in Pakistan
Oil prices weakened after signs emerged that Iran would attend talks with the United States in Pakistan to end the war that has rocked energy markets. Brent traded around US$95 per barrel after surging 5.6% on Monday (April 21), as investors assessed the chances of a de-escalation ahead of the ceasefire's expiration.
Iran was said to be sending a team to Pakistan for negotiations, although it was unclear who would be coming or when. However, Iran's state broadcaster denied reports that the delegation had departed or arrived in Islamabad, adding to uncertainty about the schedule and format of the talks.
US President Donald Trump said Vice President JD Vance was expected to resume in-person negotiations "Tuesday night or Wednesday morning," and said there was "very little chance" the ceasefire would be extended. Trump said the ceasefire would expire "Wednesday night Washington time."
Oil price movements in recent days have been heavily influenced by rapidly changing market perceptions regarding the status of the negotiations and the ability of ships to pass through the Strait of Hormuz, a passageway through which about one-fifth of the world's oil supply normally passes. Flows through Hormuz were reportedly nearly halted, with only three vessels attempting passage early Tuesday, after tensions escalated again late last week.
Several market participants and analysts believe the impact of the supply disruptions has not yet been fully reflected in prices. At the FT Commodities Global Summit in Lausanne, Trafigura chief economist Saad Rahim said the conflict has eliminated approximately 1 billion barrels of supply, potentially rising to 1.5 billion barrels if it continues; Gunvor warned that stocks could run low if the war lasts another month. Citigroup estimates that oil could rise to US$110 per barrel if disruptions in the waterway continue for another month, while IEA chief Fatih Birol believes energy volatility could last for up to two years. (gn)*
Source: Newsmaker.id
