Oil prices climbed nearly 3% on 27 April as discussions aimed at easing tensions between the US and Iran failed to progress, while the movement of oil shipments through the Strait of Hormuz experienced ongoing restrictions.
Brent crude increased by $3 to reach $108.36 per barrel (bbl) at 08:28 GMT, its highest price in three weeks, while US West Texas Intermediate (WTI) rose by $2.45 to $96.85/bbl, reported Reuters.
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Last week, Brent and WTI recorded their largest weekly gains since the start of the conflict, advancing approximately 17% and 13%, respectively.
Negotiations to resume talks between the US and Iran made no progress over the weekend after US President Donald Trump stated: “Iran could telephone if it wants to negotiate an end to their two-month war.”
Iranian Foreign Minister Abbas Araqchi made visits to mediators in Pakistan and Oman, and subsequently travelled to Russia.
The US and Iran remain divided on several issues including Iran’s nuclear programme and the passage of oil through the Strait of Hormuz.
Tehran has kept the strait largely blocked, while Washington has imposed a blockade on Iran’s ports. Shipping data from Kpler indicated that only one oil products tanker entered the Gulf on 26 April, reflecting continued restricted access.
Analysts from Goldman Sachs, led by Daan Struyven, increased their Brent crude price outlook for the fourth quarter (Q4) to $90/bbl and $83/bbl for WTI, citing reduced production from the Middle East.
The forecast now anticipates a slower pace of recovery in production from the Gulf and normalisation of exports through the Strait of Hormuz by the end of June, rather than mid-May.
Goldman Sachs estimates that production losses of 14.5 million barrels per day (mbbl/d) from the Middle East are leading to record global inventory draws of 11–12mbbl/d in April.
The bank expects the global oil market to shift from a 1.8mbbl/d surplus in 2025 to a 9.6mbbl/d deficit in Q2 2026.
Expectations are for global oil demand to decline by 1.7mbbl/d in Q2 and by 100,000 barrels per day in 2026 compared with the previous year due to the increase in refined product prices.
