Oil Prices Ease to $98 as US–Iran Signal Fresh Ceasefire Talks After Blockade Threat

Synopsis: Oil prices slip toward $98/bbl (Brent) as US-Iran ceasefire talks resume post-blockade threat. Strait of Hormuz stays closed amid stalled negotiations and tightened global supplies.

Global oil prices slipped on Tuesday as diplomatic signals emerged from both Washington and Tehran. The two sides appear open to renewed talks, even as the Strait of Hormuz the world’s most vital oil artery remains closed.

Brent crude futures fell toward $98 per barrel, pulling back from Monday’s highs. Earlier in the conflict, prices surged as high as $119 a barrel after the strait’s closure. Following Trump’s blockade announcement, US crude jumped 8% to $104.24, while Brent rose 7% to $102.29.

President Donald Trump confirmed that Tehran reached out to Washington first. Iranian President Masoud Pezeshkian then signalled he was open to further dialogue. However, he set one condition talks must stay within international law.

The two sides sat across the table for 21 hours over the weekend. Nevertheless, they left without a deal. Trump then announced a blockade on all Iranian oil shipments a move that sent markets into fresh turmoil.

Trump initially threatened to block “any and all” ships entering or leaving the strait. His own military later narrowed that scope. The US Central Command said it would only target vessels heading to Iranian ports. Ships bound for Gulf allied ports would pass freely.

Further confusion followed. A US military notice to seafarers said enforcement would apply only east of the strait, according to Reuters. Meanwhile, allies pushed back. The UK, Australia, and Spain all declined to back the move.

Experts say executing the blockade alone will be difficult. “Trump wants a quick fix. The reality is, this mission is difficult to execute alone and likely unsustainable,” said Dana Stroul, a former senior Pentagon official.

The Strait of Hormuz carries around 20% of the world’s oil and gas. Since Iran shut the waterway, global energy supplies have tightened sharply. Prices have surged, inflation fears have grown, and fertiliser exports essential for food production have collapsed.

Reopening the strait was a key sticking point during weekend negotiations. Tehran reportedly wants to keep control of the waterway. It also floated a plan to charge ships up to $2 million per transit. Trump and other world leaders flatly rejected that idea.

Iran’s Revolutionary Guards warned that any US warship approaching the strait to enforce a blockade would breach the ceasefire. They said the waterway remains firmly under Iranian control.

OPEC+ output already fell by 7.9 million barrels per day in March, largely because of the strait’s closure. Markets are now waiting for the IEA’s monthly report to get a clearer picture of global supply and demand.

Analysts warn that prices could climb further. Kevin Book of ClearView Energy Partners said leaner supply generally pushes markets tighter. “Iranian and Houthi reprisals against Gulf producers’ alternative routes could drive prices still higher,” he added. For now, the world watches and waits. Each diplomatic signal moves oil prices. And each failed negotiation keeps the global economy on edge.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Oil Prices Ease to $98 as US–Iran Signal Fresh Ceasefire Talks After Blockade Threat appeared first on Trade Brains.