Oil prices continue to fall on hopes of new US-Iran peace talks
Oil prices continue to fall on hopes of new US-Iran peace talks
Tuesday saw oil prices decline amid renewed optimism for US-Iran peace discussions, which have alleviated worries over potential supply interruptions. The global benchmark Brent crude fell 3.8% to $95.54 per barrel, while US West Texas Intermediate dropped 6.1% to $92.85. This reversal followed a sharp rise on Monday, when prices briefly exceeded $100, after Trump ordered Iran’s ports to be blocked following weekend negotiations that stalled.
Trump later expressed that Tehran had reached out to Washington, indicating a willingness to settle differences. During Monday’s press conference, he stated: “We’ve been contacted by the other side. They’re eager to finalize a deal.”
The New York Times revealed Iran had suggested a five-year pause on uranium enrichment, a proposal the US dismissed, demanding a 20-year commitment instead. Officials from both nations confirmed that talks in Pakistan had seen proposals exchanged on halting nuclear activities, though a consensus has yet to form. Nevertheless, the discussions hint at a potential second round of direct talks.
Fatih Birol, head of the International Energy Agency (IEA), emphasized that current prices don’t fully capture the crisis in the Middle East. Despite the retreat from $100, crude oil remains higher than its pre-war level of $73 on 28 February. Birol noted: “April may well be even worse than March, because March’s cargoes were loaded before the crisis… while April’s shipments are yet to begin.” He added that the IEA recorded the “largest disruption in history” in March, with supplies plummeting 10.1 million barrels per day to 97 million.
Birol also mentioned the IEA’s readiness to act again, stating that 400 million barrels released last month accounted for only 20% of their reserves. “We still have 80% in our pocket,” he said, “and are assessing whether to act again if needed.”
Rahman Daiyan, an energy researcher at the University of New South Wales, pointed out that Iran’s direct oil contribution is modest, but prices could climb if the blockade triggers broader Gulf supply issues. Meanwhile, BP expects its trading division to report “exceptional” results for the first quarter, contrasting with the “weak” performance in the final three months of 2025.
“The further drops today reflect renewed confidence in a lasting agreement,” said Lindsay James, an investment strategist at Quilter. “Signs that Iran may avoid testing the blockade, along with the possibility of new talks, have eased market fears.” She
