(April 23): Oil held a three-day gain as the US and Iran remained locked in a battle for control of the Strait of Hormuz after failing to meet for a fresh round of peace talks.
West Texas Intermediate traded near US$93 a barrel, after gaining more than 10% in the week’s first three sessions, while Brent closed near US$102 on Wednesday. US President Donald Trump said the truce agreed April 7 would stay in place indefinitely while Washington waits for Iran to submit a new peace proposal, although Tehran says it has no plans to take part in negotiations imminently.
The war has rattled energy markets since it started at the end of February, with the near-closure of the Strait of Hormuz causing a sharp drop in flows from major producers in the Persian Gulf. The US maintained a naval blockade on ships going to and from Iran’s ports to pile pressure on the Islamic Republic, in a move Foreign Minister Abbas Araghchi called a violation of the ceasefire.
“Tensions are remaining high, and with the US and Iran currently at a stalemate on agreements, until somebody flinches, the path of least resistance for prices still looks higher,” said Dennis Kissler, senior vice president for trading at BOK Financial Securities Inc. “The longer no oil flows through the strait, the higher we will go with prices.”
Washington and Tehran remain deadlocked on several other key issues, including the Islamic Republic’s nuclear capabilities and Israel’s invasion of Lebanon. Iranian President Masoud Pezeshkian said in a post that while Iran welcomes talks, the “blockade and threats are main obstacles” to diplomacy.
Iran is keeping Hormuz closed to almost all other international traffic, and the country’s gunboats fired on commercial ships in the strait on Wednesday.
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Elsewhere, traders also closely followed key US oil inventory data published Wednesday by the Energy Information Administration, which showed declines across all major refined product categories. The world has been looking to US supplies to offset disruptions from the Middle East and that heightened demand pushed total oil and fuel exports to a fresh record, according to the agency.
Uploaded by Isabelle Francis
