By Arathy Somasekhar April 23 (Reuters) - Oil prices were marginally lower on Thursday after big gains in the previous session amid the stalled peace talks between Iran and the United States, and as
Crude oil futures jump on reports of air attacks, Iran power struggle
Market Reaction and Geopolitical Developments
By Erwin Seba
HOUSTON, April 23 (Reuters) - Crude oil futures spiked $5 a barrel on Thursday after reports that air defenses were engaging targets over Tehran and of a power struggle between Iran's hardliners and moderates.
After spiking, the benchmarks pared gains.
Brent crude futures settled at $105.07 a barrel, gaining $3.16 or 3.1%. West Texas Intermediate futures finished at $95.85 a barrel, up $2.89, or 3.11%.
Iran Negotiator Quits Amid Tensions
IRAN NEGOTIATOR QUITS
Israeli radio reported the resignation of Iran's top negotiator, Mohammad Baqer Qalibaf, from the team speaking to the U.S. through Pakistani intermediaries about ending the war.
Qalibaf's resignation was seen as a victory for hardline elements within the Iranian government.
Escalation in Tehran and Regional Impact
Iranian news services said air defenses in Tehran were engaging targets over the city. That followed reports of drone attacks on Iranian Kurdish opponents of the Tehran government at a base in Iraq.
Iran flaunted its tightened grip over the Strait of Hormuz with video of its commandos storming a huge cargo ship, after the collapse of peace talks that Washington had hoped would open the important shipping corridor.
U.S. Response and Market Sentiment
U.S. President Donald Trump said in a social media post that he had ordered the U.S. Navy "to shoot and kill any boat" mining the strait.
John Kilduff, partner with Again Capital, said the market was being buffeted by alternating news reports of Trump extending the ceasefire this week and threatening to sink Iranian mine-laying ships.
"Some people call it headline bingo, I call it headline roulette," Kilduff said. "I fear we're going to wake up one day and realize we're in a much worse (supply) position and prices are going to reset to a much higher level."
Strait of Hormuz Transit Still Restricted
STRAIT OF HORMUZ TRANSIT STILL RESTRICTED
While Trump extended a ceasefire between the countries after a request by Pakistani mediators, Iran and the U.S. are still restricting transit of ships through the strait, which carried about 20% of daily global oil supplies until the start of the war on February 28.
Trump, without providing evidence, said on Thursday the U.S. had "total control" over the strait, and that it was "sealed up tight" until Iran made a deal.
Iran seized two ships in the waterway on Wednesday. Trump has maintained a U.S. Navy blockade of Iran's trade by sea.
Oil Exports and Military Actions
However, about 10.7 million barrels of Iranian crude exports crossed through the strait and left the area blockaded by the U.S. Navy between April 13 and 21, data analytics company Vortexa said.
The U.S. military has intercepted at least three Iranian-flagged tankers in Asian waters and is redirecting them away from positions near India, Malaysia and Sri Lanka, shipping and security sources said on Wednesday.
Trump has not set an end date for the extended ceasefire, White House press secretary Karoline Leavitt told reporters.
Market Outlook and Industry Sentiment
Phil Flynn, senior analyst with Price Futures Group, said prices were constrained by confidence in the crude market.
"The market continues to believe we're going to find a way through this," Flynn said.
The Federal Reserve Bank of Dallas on Thursday said a survey of 120 oil and natural gas company executives this month found 39% expect traffic through the strait to return to normal by August and 26% expect normal traffic through the waterway by November.
Twenty percent of the executives surveyed between April 15 and 20 believe traffic will be normal by May, according to the Dallas Fed.
Reporting Credits
(Reporting by Erwin Seba, Ahmad Ghaddar and Robert HarveyEditing by Franklin Paul, Paul Simao, Keith Weir, Rod Nickel)
