Oil prices held steady on 16 April, rebounding from earlier losses amid uncertainty over whether US-Iran peace talks would succeed in easing the Middle East conflict that has disrupted oil production.
By 06:11 GMT, Brent crude futures had decreased by $0.26 to $94.67 per barrel (bbl), reported Reuters.
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Meanwhile, US West Texas Intermediate (WTI) futures had risen by $0.14 to $91.43/bbl.
Both benchmarks showed minimal movement on Wednesday, despite fluctuating significantly throughout the day.
The conflict involving the US, Israel and Iran has caused disruptions to global oil and gas supplies, with Iran restricting traffic through the Strait of Hormuz, a key passage for around 20% of the world’s oil and liquefied natural gas.
Following the breakdown of peace talks last weekend, the US announced a blockade on Iranian ports, potentially exacerbating the disruption.
A source informed by Tehran told the news agency that Iran may permit ships to navigate the Omani side of the Strait of Hormuz if a deal is achieved to avoid renewed conflict. This follows the commencement of a two-week ceasefire on 8 April.
Furthermore, US and Iranian representatives are considering resuming talks in Pakistan as early as the upcoming weekend. Pakistan’s army chief arrived in Tehran on Wednesday to help avert further conflict.
US Treasury Secretary Scott Bessent announced on Wednesday that Washington will not renew waivers that permitted the purchase of certain Iranian and Russian oil without incurring US sanctions.
Highlighting the strain on global crude and oil product supplies, the US Energy Information Administration reported on Wednesday that inventories of oil, petrol and distillate fuels declined last week. This was due to a decrease in imports and an increase in exports to fulfil the demand from countries seeking alternative supplies amidst disruptions.
Meanwhile, analysts have said that Iran could endure a complete shutdown of oil exports for up to two months before needing to reduce production, reported Reuters.
The blockade could prevent approximately two million barrels per day (mbbl/d) of Iranian crude from reaching China, its primary buyer.
Any production halts in Iran would add to the more than 12mbbl/d that is already disrupted due to regional conflict, further tightening markets and pushing oil prices higher.
