(April 28) : Oil held a gain as traders weighed the next steps toward peace talks over the Iran war, with the US discussing a proposal from Tehran while the crucial Strait of Hormuz remained almost impassable.
West Texas Intermediate traded near US$96 a barrel after gaining 2.1% on Monday. Brent settled above US$108. US President Donald Trump convened a meeting to discuss the proposal, but maintained red lines on any deal to end the war, including preventing Tehran from obtaining a nuclear weapon.
A ceasefire has broadly held since early April, but a blockade of the Strait of Hormuz by Iran and the US has reduced daily transits of the waterway to near zero. The closure has choked off flows of crude, natural gas and oil products, driving up energy prices and raising concerns about an inflation crisis.
“There’s still a prevailing expectation that flows begin to normalize through May and June, which has helped keep prices somewhat contained,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group. “But the clock is ticking. Each day tightens the physical balance, chips away at buffers, and raises the risk of more exaggerated upside moves.”
Iranian media said Sunday that Foreign Minister Abbas Araghchi would convey to Pakistan, which is mediating peace talks, that the conflict could end if the US lift their naval blockade, agree to a new legal framework for traffic transiting the strait and guarantee there will be no future military action against Iran.
Two Iran-linked oil tankers that US forces interdicted near Sri Lanka last week as part of the country’s blockade appear to have halted their westward course in the Indian Ocean and turned around.
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