Oil Prices Decline as Markets Watch US-Iran Talks
Oil prices moved lower on Tuesday as investors weighed the possibility that renewed talks between the United States and Iran could lead to the reopening of the Strait of Hormuz. However, uncertainty remains after President Donald Trump signaled he does not intend to extend the current ceasefire, which is set to expire within hours.
Brent and WTI Edge Lower After Recent Surge
By 13:29 GMT, Brent crude futures fell 0.4% to $95.08 per barrel, while U.S. West Texas Intermediate (WTI) crude for May declined by 41 cents to $89.20. The May WTI contract is due to expire on Tuesday, with the more actively traded June contract down 0.5% at $87.00.
This follows a strong rally on Monday, when Brent and WTI surged by 5.6% and 6.9%, respectively. The gains were driven by renewed tensions after Iran closed the Strait of Hormuz again and the United States seized an Iranian cargo vessel as part of its port blockade.
Ceasefire Uncertainty Keeps Markets on Edge
In an interview with CNBC, President Trump stated that he does not plan to extend the ceasefire with Iran, although he expressed confidence that a favorable agreement could still be reached.
Adding to the uncertainty, an Iranian official confirmed that no final decision has been made regarding participation in upcoming negotiations.
Strait of Hormuz Disruptions Raise Supply Concerns
Shipping activity through the Strait of Hormuz—responsible for roughly 20% of global oil supply—remained restricted. European officials warned that continued disruptions could lead to fuel shortages and a challenging energy outlook for the region in the coming months.
Russia Supply Disruptions Add Pressure
Elsewhere, supply concerns intensified following a Ukrainian drone attack on Russia’s Tuapse port, a key oil export hub on the Black Sea. Firefighters continued efforts to contain the blaze more than 24 hours after the incident.
Russia has also reduced its oil output in April by an estimated 300,000 to 400,000 barrels per day. Additionally, reports indicate that oil exports from Kazakhstan to Germany via the Druzhba pipeline are expected to halt from May 1.
Market Awaits Key US Inventory Data
Investors are now turning their attention to upcoming U.S. crude and refined product inventory data, which could provide further direction for oil prices.
According to PVM analyst Tamas Varga, a sustained increase in U.S. oil exports would signal tightening supply conditions in Europe and Asia, potentially offering renewed support to the market.
