Oil Falls as Markets Weigh Supply Recovery and Prospects of U.S.-Iran Peace Deal

PUKMEDIA

Oil field.

Oil prices extended losses on Tuesday, as markets weighed prospects for resumption of supply through the key Strait of Hormuz against ‌shaky physical market drivers and a lack of details from a preliminary deal to end the Iran war.

According to Reuters report, By 0436 GMT, Brent crude futures fell 25 cents, or 0.3%, to $82.92 a barrel and U.S. West Texas Intermediate inched down 9 cents, or 0.1%, to $80.66 a barrel.

On Monday, oil prices fell nearly 5% to their lowest close since March 4, after U.S. President Donald Trump said a memorandum of understanding was signed to end the U.S.-Israeli war with Iran, though full details have not been made public.

The hostilities led to ⁠the closure of the Strait of Hormuz that typically carried one-fifth of the world's oil supply before the conflict.

Early indications are that the U.S.-Iran deal would reopen the blockaded Strait of Hormuz and extend a ceasefire for 60 days, allowing negotiators to tackle difficult issues such as the future of Iran's nuclear programme.

On Monday, Iranian President Masoud Pezeshkian called the U.S.-Iran pact an "important step" toward stopping the fighting but cautioned a final agreement for a lasting truce "has yet to take shape".
But with full details yet to emerge and a permanent truce ⁠still to be reached, overall price weakness is limited.

But the second phase, to be watched most ⁠closely by markets for its physical impact, is the phased reopening of the Strait of Hormuz and the wind-down of the U.S. naval blockade on Iranian ports and vessels, he added.




PUKMEDIA