Oil Rises, Hormuz Nearly Impassable as US-Iran Diplomacy Stalls
Oil prices rose on Monday (April 27) after efforts to resume peace talks over the Iran war stalled again, leaving the Strait of Hormuz nearly impassable and prolonging supply disruptions that have rocked global markets. The June WTI contract rose 2.1% to close at US$96.37/barrel in New York, while June Brent rose 2.8% to US$108.23/barrel.
A wave of headlines underscored the widening gap between the two sides. The White House said President Donald Trump discussed Iran's proposal with his national security team, but offered no details or US response. Over the weekend, Trump canceled a planned trip by a US envoy to Pakistan—a mediator—while Iran declared it would not negotiate under threats, blockades, or pressure. Although a ceasefire in place since early April has held relatively well, the shipping blockade by the US and Iran has reduced transit through Hormuz to near zero, locking down supplies of oil, fuel, gas, and fertilizer-related commodities and maintaining high inflation risks.
With the Hormuz flow blocked, the market is starting to shift price premiums to longer-term curves as tight supplies are expected for longer. The risk of "demand destruction" is also starting to be discussed—from airlines cutting schedules—although there are still buffers, such as the remaining coverage of European jet fuel imports, which is said to be adequate. The next direction will be largely determined by the progress of negotiations, the status of the blockade and the number of ships actually able to pass through, the escalation of maritime incidents, and sanctions and enforcement measures that could rapidly alter barrel flows. (Arl)*
Source: Newsmaker.id
