Oil prices fell in Asian trade on Tuesday as markets parsed mixed signals on more U.S.-Iran talks before the expiry of their ceasefire later this week.
Crude prices had risen sharply in the prior session, rebounding from last week’s losses after tensions between the U.S. and Iran escalated over the weekend after the capture of an Iranian vessel, prompting Tehran to once again shut the Strait of Hormuz.
Brent oil futures fell 0.5% to $95.00 a barrel, while West Texas Intermediate crude futures fell 0.9% to $86.68 a barrel by 23:37 ET (03:37 GMT).
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Trump says Iran naval blockade to remain as ceasefire end looms U.S. President Donald Trump said on Monday that a naval blockade against Iran will remain in place until a peace deal is achieved. He had earlier said that more negotiations with Iran were set to happen this week, with a delegation expected to reach Pakistan either on Tuesday or Wednesday.
Iranian officials publicly opposed more peace talks with Washington. Iran’s Speaker of the Parliament and top negotiator, Mohammad Bagher Ghalibaf, said the country would not accept negotiations “under the shadow of threats” from Washington.
Several Iranian state media reports also showed officials opposing more dialogue. But a Wall Street Journal report said Iran had privately told regional mediators that it will send a delegation to Pakistan this week.
Still, it remained unclear whether more U.S.-Iran talks will take place before a tenuous ceasefire between the two countries expires on Wednesday.
"Ongoing uncertainty continues to overshadow any peace agreement, as Iran remains reluctant to attend a second round of talks in Pakistan, citing the US blockade and vessel seizures," ANZ analysts said in a note.
Hormuz shipping remains limited, oil supply disruptions in focus Shipping activity through the Strait of Hormuz remained limited as of Tuesday morning, after Iran briefly reopened and then blocked the channel over the weekend.
Iran has effectively blocked the passage since the onset of the war in late-February, cutting off roughly a fifth of the world’s crude supplies.
This disruption was a major driver of oil price gains over the past month.
But ANZ analysts noted efforts by Saudi Arabia and UAE to bypass shipments through Hormuz. The countries were using the Yanbu and Fujairah terminals, located in the Red Sea and the Gulf of Oman, respectively, to load oil and avoid Hormuz.
ANZ said combined loading at the facilities had risen to 6.5 million barrels per day, up from 5.0 million bpd seen before the war.
