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Oil Extends Gain as Peace Negotiations Between US and Iran Stall - BLOOMBERG
(Bloomberg) -- Oil rose for a fourth day 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.
Brent traded near $103 a barrel after jumping almost 13% in the last three sessions, while West Texas Intermediate was around $94. 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.
Global benchmark Brent jumped as much as 4.2% early in the session before quickly reversing on unconfirmed reports that there were explosions in Iran.
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 he 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. Since the US naval blockade was put in place earlier this month, American forces have seized and boarded ships, and turned back dozens of others.
Traffic through the Strait of Hormuz ground to a halt on Thursday. Just one bulk carrier was seen moving through the waterway, with none seen entering.
Elsewhere, traders followed 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.
