DTN Oil Update
Oil Down 3% as New US-Iran Talks Seen
VIENNA (DTN) -- Oil futures fell as much as 3% on Tuesday morning amid reports that Iranian and U.S. officials were set to meet for a second round of talks in Islamabad later this week, raising hopes again for a solution to the Middle East conflict.
By 8:55 a.m. EDT, NYMEX WTI crude for May delivery was down $3.18, or 3.2%, to $95.90 bbl, while ICE Brent for June delivery slid $1.48, or 1.5%, to $97.88 bbl.
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Downstream, RBOB futures for May delivery slipped by $0.0339 to $3.0821 gallon, and front-month ULSD futures retreated by $0.0379 to $3.7962 gallon.
The U.S. Dollar Index softened by 0.343 points to 97.82 against a basket of foreign currencies.
The current two-week ceasefire between the U.S. and Iran is set to expire April 21. Tehran has repeatedly sought a permanent end to hostilities rather than a temporary truce. Last weekend's negotiations between delegations from Washington, D.C. and Tehran, however, ended without breakthrough.
Vice President JD Vance told reporters after the meeting that the U.S. had presented its "best and final offer" for a deal. Iranian foreign minister Abbas Araghchi said the failure to reach an agreement was allegedly due to the constant shifting of U.S. demands despite progress on several issues.
Remarks by U.S. President Trump on Monday also added to hopes of a detente. "I think Iran will now agree on nuclear", Trump said, referencing a key U.S. demand that Iran stop all uranium enrichment -- something Tehran has rejected so far. He added that he was "called this morning by Iran, they want a deal."
The International Energy Agency, meanwhile, warned that oil futures prices are not reflecting the scale of the oil supply crisis triggered by the U.S.-Israeli war on Iran and the subsequent closure of the Strait of Hormuz. The Paris-based energy watchdog is expecting high prices and supply shortages to lead to demand destruction, which is likely to spread to regions outside of the Middle East and Asia.
In its latest oil market report published today, the IEA forecast global oil demand to shrink by 80,000 bpd in 2026, compared with the 640,000-bpd expansion predicted in last month's report. The agency forecast global demand to plummet by 1.5 million bpd in the second quarter, which would mark the sharpest decline since the 2020 pandemic.