Oil Steady, Market Doubts US-Iran Peace Will Restore Hormuz Flows
Oil prices moved slightly on Thursday after reversing initial declines, as the market doubted that US-Iran peace talks would soon produce a deal strong enough to reverse supply disruptions in the key Middle East producer region. Brent rose 9 cents to US$95.02/barrel at 04:27 GMT, while WTI rose 44 cents to US$91.73/barrel.
Market caution stems from risks in the Strait of Hormuz, which remains a major stress point. The US-Israel conflict with Iran is said to have triggered the largest disruption in history to global oil and gas supplies due to the disruption of traffic in Hormuz—a passage that typically carries about 20% of global oil and LNG flows. Analysts at Fujitomi Securities believe that hopes for de-escalation remain, but investors are skeptical because US-Iran negotiations have often stalled despite initial signs of progress.
As long as there is no agreement and free navigation in Hormuz remains unresolved, volatility is expected to persist. Fujitomi estimates WTI could continue to fluctuate between US$80 and US$100 per barrel. ING added that approximately 13 million barrels per day of oil flows are affected by the strait closure, after accounting for pipeline diversions and limited tanker passage.
On the geopolitical front, the risk of disruption could increase after the US announced a blockade of Iranian ports following the collapse of peace talks over the weekend. However, sources familiar with Tehran's position said Iran could consider reopening shipping through the Omani side of Hormuz if a deal is reached to prevent a resumption of conflict following a two-week ceasefire that began on April 8. US and Iranian officials are also said to be considering returning to Pakistan for further talks as early as this weekend, while Pakistan's military chief arrived in Tehran on Wednesday as a mediator.
Policy factors and supply data underscore the tightness of the physical market. US Treasury Secretary Scott Bessent said Washington would not extend a waiver that allows some Iranian and Russian oil purchases without US sanctions. In the US, the EIA reported that crude oil, gasoline, and distillate inventories fell last week due to weaker imports and higher exports, as several countries sought to replace supplies disrupted by the Hormuz outbreak. (asd)
Source: Newsmaker.id
