Oil prices slid on Tuesday morning amid positive signs that the United States may be open to further talks with Iran.
Futures on Brent crude (BZ=F), the international benchmark, shed roughly 1.4% on the session to trade below $98 per barrel. Those on US benchmark West Texas Intermediate (WTI) crude (CL=F) fell a steeper 3.2% to trade below $96 per barrel.
Prices in the physical market for a barrel of Brent for prompt delivery remained elevated Tuesday morning, trading above $130 per barrel, according to Bloomberg data. At the same time, the US dollar (DX-Y.NYB) fell and gold futures (GC=F) surged, reversals of the trend throughout the conflict.
Roughly one day into the US blockade of the Strait of Hormuz, traffic through the world’s most critical waterway for global energy flows has slowed to only a trickle but hasn’t stopped entirely.
Since Monday, April 13, only six vessels had exited the strait as of roughly 6:30 a.m. ET on Tuesday, two each carrying refined oil products and methanol, and two empty of any cargo, according to data from the global trade intelligence platform Kpler.
Of those ships, three of them — one carrying refined products, one carrying methanol, and one empty — reportedly exited the strait from Iranian ports. US Central Command said on Monday that the blockade will not apply to ships entering and exiting to and from friendly, non-Iranian ports.
It remains unclear how the US is handling potential stoppages of non-Iranian vessels. Early Tuesday morning, the China-linked tanker Rich Starry — sanctioned by the US in 2023 for moving Iranian oil — made the crossing out of the strait seemingly without impediment by the US military.
At the same time, potential positive signals for another round of negotiations between Washington and Tehran have stoked hopes among a market that, according to Capital.com analyst Kyle Rodda, “really wants to give peace a chance.”
Although the US and Iran ended marathon 21-hour talks in Islamabad, Pakistan, on Saturday with no deal reached, Iran is reportedly open to reopening negotiations. Talks could restart in Islamabad as soon as this week, Reuters reported Tuesday morning. Iran is reportedly considering a temporary halt to its shipments through the Strait of Hormuz to avoid testing the US Navy’s blockade and potentially derailing talks before they can begin again, according to Bloomberg.
While other issues such as a reopening of the Strait of Hormuz and the status of US economic sanctions on Iran remain central to any talks, Iran’s nuclear enrichment program has emerged as perhaps the driving wedge issue between the American and Iranian negotiation teams.