Oil Steady as US-Iran Prepare Talks, Hormuz Blockade Remains Pressured
Oil prices held losses on Wednesday after the market signaled that the US and Iran were preparing for a second round of peace talks in the coming days, while the blockade of the Strait of Hormuz continued to restrict the flow of energy supplies crucial to the global economy. West Texas Intermediate (WTI) held steady around US$91/barrel after plunging nearly 8% on Tuesday.
Sources familiar with the discussions said the goal is to hold additional talks before the ceasefire expires next week. One option being discussed is a return to Pakistan, although other locations are also being considered. President Donald Trump, quoted by the New York Post, said talks could resume “in the next two days” in Pakistan, following a marathon session that failed to produce a breakthrough in Islamabad last weekend.
On the operational front, the US is maintaining a naval blockade of Hormuz to suppress Iranian oil exports. Tehran is said to be considering a brief pause in shipping through the strait to avoid “testing” the US corridor, according to sources familiar with the plans. The combination of diplomatic hopes and the risk of implementing the blockade means that price movements remain highly sensitive to headlines.
The global oil market remains in a tight phase due to the conflict's supply shock, but rising prices for physical oil and products like gasoline have put pressure on consumers and demand. The International Energy Agency (IEA) expects global oil consumption to decline this year. Rebecca Babin (CIBC) said the market is leaning toward a scenario of normalization of flows by the end of April, but key signals to monitor are a continued increase in shipping traffic and progress in negotiations.
On the US supply side, the Treasury Department stated that the government will allow a temporary waiver on certain purchases of Iranian oil to expire this weekend to increase pressure on Tehran. Meanwhile, the American Petroleum Institute (API) reported that US crude inventories rose by 6.1 million barrels last week; if confirmed by official data on Wednesday, this would be the eighth consecutive week of increases. May WTI was last around US$91.40 in the Asian session, while June Brent fell 4.6% on Tuesday to close at US$94.79/barrel.
5 Key Points:
- WTI stabilized near US$91 after falling nearly 8% on Tuesday; markets focused on US-Iran talks.
- The US and Iran are reportedly preparing for a second round of negotiations before the ceasefire ends next week; options include Pakistan.
- The US blockade of Hormuz remains in effect; Iran is considering a brief pause in shipments to avoid escalation.
- The IEA projects oil consumption will decline this year; energy prices will pressure consumers and demand.
- API: US oil stocks rose by 6.1 million barrels (potential for an eighth consecutive week); the waiver on Iranian oil purchases ends this weekend. (asd)*
Source: Newsmaker.id
