Oil Steady, Iran Proposal Weighed as Flows Remain Sluggish
Oil prices held firm as market participants weighed the next steps in potential peace talks over the Iran war. Market focus was on the U.S. government's discussion of Tehran's proposal, while the Strait of Hormuz remained nearly impassable.
Brent traded around $108 per barrel after rising 2.8% on Monday (April 28), while WTI hovered above $96. U.S. President Donald Trump held a meeting to discuss the proposal but maintained his "red lines," including preventing Iran from acquiring nuclear weapons.
While a general ceasefire has held since early April, the blockade by Iran and the U.S. is said to have reduced daily transit through Hormuz to near zero. This closure has hampered the flow of crude oil, natural gas, and petroleum products, keeping energy prices high and raising concerns about inflation risks.
Rebecca Babin of CIBC Private Wealth Group believes there are still expectations that flows will begin to normalize in May-June, preventing further price movements. However, he emphasized that each day of tightening tightens the physical supply balance, eroding buffers and increasing the risk of a sharper price spike.
Iranian media reported that Foreign Minister Abbas Araghchi would convey to Pakistan—which is mediating the talks—that the conflict could end if the US lifted the naval blockade, agreed to a new legal framework for traffic in the strait, and provided assurances of no further military action against Iran. The Wall Street Journal reported that the US remained skeptical but would continue negotiations and likely prepare responses and counter-proposals in the coming days.
On the supply side, two Iran-linked tankers intercepted by the US near Sri Lanka last week reportedly turned back, while a blockade of shipping to and from Iranian ports since April 13 has turned back dozens of vessels. Kpler believes Iran is rapidly running out of storage space, risking further output cuts, in line with the US Treasury Secretary's statement that Iran's oil industry has begun shutting down production due to the blockade. In recent trading, June Brent crude was flat at $108.23 (8:21 a.m. Singapore time), July Brent crude was flat at $101.95, and June WTI crude rose 0.3% to $96.65. (Asd)
Source: Newsmaker.id
