Oil Prices Slip as US-Iran Uncertainty Weighs on Markets
Oil prices edged lower during Asian trading on Tuesday, as investors assessed mixed signals surrounding potential U.S.-Iran negotiations ahead of a ceasefire set to expire later this week.
The decline follows a sharp rebound in the previous session, when crude prices surged after escalating tensions between the U.S. and Iran. The spike was triggered by the seizure of an Iranian vessel, which led Tehran to once again shut down the Strait of Hormuz.
Brent crude futures fell 0.5% to $95.00 per barrel, while West Texas Intermediate (WTI) dropped 0.9% to $86.68 per barrel.
Trump Maintains Iran Blockade Ahead of Ceasefire Deadline
U.S. President Donald Trump confirmed that the naval blockade on Iran will remain in place until a peace agreement is reached. He also indicated that further negotiations could take place this week, with a U.S. delegation expected to travel to Pakistan.
However, Iranian officials have publicly rejected the prospect of negotiations under pressure. Iran’s Parliament Speaker, Mohammad Bagher Ghalibaf, stated that Tehran would not engage in talks “under the shadow of threats.”
Despite this stance, reports suggest that Iran may still participate in discussions, as it has reportedly informed regional mediators of plans to send a delegation to Pakistan.
Uncertainty Over Peace Talks Persists
It remains unclear whether the two sides will meet before the current ceasefire expires on Wednesday. Analysts note that ongoing uncertainty continues to overshadow any potential agreement, particularly given Iran’s objections to the U.S. blockade and recent military actions.
Strait of Hormuz Disruptions Impact Global Supply
Shipping activity through the Strait of Hormuz remains heavily restricted. Although Iran briefly reopened the critical shipping route over the weekend, it has since reimposed restrictions, limiting global oil flows.
Since the conflict began in late February, Iran’s actions have effectively disrupted a significant portion of global crude supply, with the Strait accounting for roughly 20% of worldwide oil shipments.
Alternative Supply Routes Emerge
In response to these disruptions, major oil producers such as Saudi Arabia and the United Arab Emirates have increased shipments through alternative routes.
Exports are being redirected via the Yanbu terminal on the Red Sea and the Fujairah terminal in the Gulf of Oman, allowing producers to bypass the Strait of Hormuz.
According to analysts, combined output from these alternative routes has risen to approximately 6.5 million barrels per day, up from 5.0 million barrels per day prior to the conflict.
