Crude oil climbed about 3 per cent on Tuesday after Iran said it had yet to decide whether to attend peace talks with the United States.
With one day left before the ceasefire runs out in the Iran war, US President Donald Trump said he hoped to reach a deal to end the war. However, he said he did not want to extend the ceasefire, adding that the US military was “raring to go” if negotiations were not successful.
This development raised the price of Brent futures by $3 or 3.1 per cent to $98.48 a barrel, and lifted the US West Texas Intermediate (WTI) futures by $2.52 or 2.8 per cent to $92.13 per barrel.
Crude oil prices have spent most of March-April seesawing up and down, reacting to Iran’s closure of the Strait of Hormuz and President Trump’s Truth Social posts.
The lack of progress in US-Iran talks and their continuous postponement are keeping the oil market on edge, with the American President’s latest comments about no extension sending another wave of anxiety across market watchers.
Shipping traffic through the Strait of Hormuz, which normally handles about 20 per cent of global oil and liquefied natural gas supplies, remained broadly halted on Tuesday with only three ships passing the waterway in the past 24 hours. Over 1 billion barrels of crude have been disrupted due to the blockade.
Meanwhile, the Israeli military said Hezbollah fired rockets at Israeli troops in southern Lebanon, accusing the Iran-backed group of violating a ceasefire ahead of US-mediated talks between the government of Israel and Lebanon this week.
The European Union (EU) said it will provide guidance to airlines on how to handle issues such as airport slots, passenger rights and public service obligations in the event of jet fuel shortages because of the Iran war.
Countries continued to feel the effects of the war. In Germany, the biggest economy in Europe, investor morale declined to its lowest level in more than three years in April, while in the US, retail sales increased more than expected in March as the war in Iran boosted gasoline prices.
Ukrainian President Volodymyr Zelenskiy said the Druzhba oil pipeline, which pumps Russian oil to Europe, is ready to resume operations, signalling that Ukraine now expects an over $106 billion aid package to be unblocked.
The American Petroleum Institute (API) estimated that crude oil inventories in the US fell by 4.4 million barrels in the week ending April 17. In the week prior, US crude oil inventories rose by 6.10 million barrels. Official data from the Energy Information Administration (EIA) will be released later on Wednesday.
