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
On Tuesday, global oil prices dipped further as optimism about renewed US-Iran negotiations eased fears of ongoing supply chain disruptions. The benchmark Brent crude price dropped 3.8% to $95.54 per barrel, while US West Texas Intermediate fell 6.1% to $92.85. This decline followed a surge above $100 per barrel on Monday, which was driven by escalating tensions after US President Donald Trump imposed a blockade on Iran’s ports following weekend talks that stalled.
Trump later indicated Tehran had reached out to Washington, suggesting a potential agreement. During a Monday press briefing outside the White House, he stated:
“I can tell you we’ve been called by the other side. They’d like to make a deal very badly.”
Separately, the New York Times reported that Iran had floated a proposal to halt uranium enrichment for up to five years, an offer the US dismissed, insisting on a 20-year suspension. The report, citing officials from both nations, noted that discussions in Pakistan revealed tentative proposals to pause nuclear activities, though a full accord remains elusive.
Despite the progress, markets are still cautious. Lindsay James, a Quilter investment strategist, attributed the Tuesday declines to “glimmers of hope” that both sides are committed to a lasting peace. She highlighted that the prospect of a second round of talks, combined with Iran’s decision to halt shipments rather than provoke military conflict, helped calm traders.
“News of a potential second round of talks has been helpful in soothing markets, alongside the suggestion that Iran will not test the US blockade, instead opting to pause shipments to avoid a military confrontation,”
James added.
Jiajia Yang, an associate professor at James Cook University, noted that the price easing might also reflect short-term market adjustments after Monday’s sharp rise.
“Trump’s comments on Monday may have been seen as a ‘sign of possible de-escalation,'”
Yang said. The IEA’s executive director, Fatih Birol, warned that current prices don’t fully capture the Middle East’s challenges. “April may well be even worse than March,” he cautioned, explaining that March’s price drop was partly due to pre-crisis cargo shipments, while April sees no new supplies being loaded.
The IEA’s latest report confirmed March’s supply disruption as the most severe in history, with global output falling 10.1 million barrels per day to 97 million barrels per day. Last month, the agency’s 32 members released 400 million barrels to ease shortages, and Birol hinted at further action if needed. “Four hundred million barrels is only 20% of our resource,” he said. “We have still 80% in our pocket. We are assessing the decision. If and when we decide it is the time, we are ready to act and act immediately.”
Analysts also consider the impact of the US blockade on energy flows. Rahman Daiyan, an energy researcher at the University of New South Wales, pointed out that while Iran contributes modestly to global supply, prices could climb if the conflict intensifies and disrupts Gulf shipments. Some companies, like BP, are watching closely. The oil giant anticipated “exceptional” results for its trading division in the January-March period, a sharp contrast to the weak performance seen in the final three months of 2025.
Asian stock markets saw gains on Tuesday, reflecting renewed confidence in the possibility of de-escalation. However, the outcome of Tehran’s decision to delay nuclear plans will remain a critical factor in shaping future oil price trends.