Oil Markets Stabilize Around $95 Amid US-Iran Ceasefire Talks and Hormuz Blockade

Key Takeaways

• Brent crude maintains levels close to $95 per barrel, while WTI fluctuates between $88 and $91
• Washington and Tehran are exploring a 14-day ceasefire prolongation before the April 21 deadline
• The Strait of Hormuz continues to face significant disruptions, threatening 3.8 million barrels per day
• China reported first-quarter GDP expansion of 5% annually, providing modest support for oil consumption outlook
• International energy agencies including the IEA and OPEC cite conflict-driven demand headwinds

Crude oil markets have found relative stability this week as the United States and Iran contemplate prolonging their temporary ceasefire by an additional two weeks, providing negotiators more runway to pursue a lasting diplomatic resolution that has thus far remained elusive.

Brent crude futures are maintaining positions in the vicinity of $95 per barrel. West Texas Intermediate continues to fluctuate within the $88 to $91 range. Both key benchmarks remain elevated approximately 33% compared to pre-conflict levels from late February, although significantly below the $120 spike witnessed during the initial phase of hostilities.

The existing truce arrangement between Washington and Tehran faces expiration on April 21. Diplomatic discussions conducted in Pakistan over the previous weekend failed to produce a breakthrough agreement. International mediators are currently attempting to facilitate technical-level conversations addressing the most contentious sticking points, particularly the restoration of traffic through the Strait of Hormuz and Tehran’s uranium enrichment activities.

Commander Ali Abdollahi of Iran’s joint military operations headquarters issued a stern warning that continued American blockade measures would result in Iran preventing all commercial shipping through the Persian Gulf, the Sea of Oman, and the Red Sea waterways.

Washington has implemented naval enforcement operations designed to restrict Iranian maritime activity. In response, Tehran has maintained closure of the strait to most international vessel traffic. The Strait of Hormuz serves as the critical connection point between Persian Gulf producers and worldwide energy markets.

Vivek Dhar, an analyst with Commonwealth Bank of Australia, noted that approximately 3.8 million barrels of crude oil and refined products that transited the strategic waterway last month now face significant risk due to the ongoing blockade.

Disconnect Between Futures and Physical Markets

Kaes Van’t Hof, who serves as chief executive of Diamondback Energy, observed that oil futures contracts fail to accurately capture conditions in the actual physical crude market. According to Van’t Hof, futures pricing increasingly assumes de-escalation scenarios rather than reflecting the tangible situation on the ground.

Warren Patterson, commodities strategist at ING Groep, reinforced this assessment, noting that any ceasefire arrangement is expected to remain tenuous given the substantial gap between American and Iranian negotiating positions, creating pronounced upside risk for prices moving forward.

Both the International Energy Agency and OPEC issued warnings this week regarding the conflict’s dampening effect on worldwide oil consumption.

Chinese Economic Data Provides Limited Support

China’s economy expanded at a 5% annual rate during the opening quarter of 2026, achieving the top end of the government’s yearly growth objective. The figures exceeded analyst projections and contributed to improved sentiment surrounding oil demand from the world’s primary crude importing nation.

Nevertheless, economic expansion decelerated as the quarter progressed. China sources a substantial portion of its crude supplies from Iran, introducing additional uncertainty into future demand projections.

In related developments, Thailand is pursuing emergency procurement arrangements for petroleum and fertilizer products through Oman. Meanwhile in Australia, a fire incident at Viva Energy’s Geelong refining facility has reduced domestic fuel output capacity. India’s government has cautioned that the economic reverberations from the conflict could rival the disruption experienced during the pandemic crisis.

US President Donald Trump stated this week that resolution of the conflict appears imminent and that additional diplomatic engagement could materialize within the coming days.

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