Oil edges higher as traders weigh Iran’s Hormuz offer and Trump’s next move
Alexander Manzyuk | Reuters
Oil prices rose slightly on Tuesday as investors evaluated new signals from U.S.-Iran talks and uncertainty about easing tensions kept markets on edge.
West Texas Intermediate futures rose 0.66% to $97.03 per barrel, while international benchmark Brent oil futures rose 0.44% to $108.67 per barrel.
The high prices came after US President Donald Trump and his national security team discussed Tehran’s proposal to reopen the Strait of Hormuz conditional on Washington lifting the blockade and ending hostilities, according to White House press secretary Karoline Leavitt.
US oil prices since the beginning of the year
It remains unclear whether Trump, who has said the easing of sanctions will only happen when the agreement is “100 percent complete”, is willing to consider the offer as a way to reduce tensions in the two-month-long conflict.
“I will confirm that the president met with his national security team this morning,” Leavitt said when asked about the reports at a news conference Monday afternoon.
Energy flows through the Strait of Hormuz, which carries about one-fifth of the world’s oil and liquefied natural gas, have been severely disrupted, affecting about 20 million barrels per day of crude oil, fuels and petrochemicals, according to Andy Lipow, president of Lipow Oil Associates.
Lipow stated that even if the conflicts ended immediately, it would take months to return to normal market conditions, and that mines should be cleared, tanker congestion should be eased, and production and refinery should be gradually restarted.
Factoring in shipping and distribution delays, he estimated that it would take at least four to six months for oil markets to stabilize and that prices would likely remain high as inventories approached critical levels.
“The longer the conflict lasts, the higher the price, especially as stocks are drawn down to critical operating levels. If the conflict ends tomorrow, crude oil prices are estimated to fall by $10 per barrel.”
Lipow said that if there are no new negotiations, the WTI crude oil price will return to $ 100, while Brent crude oil will rise above $ 110.
