By Yuka Obayashi TOKYO, April 16 (Reuters) - Oil prices fell in early trade on Thursday as hopes for easing U.S.-Iran tensions, following reports that Iran could allow ships to pass through around the
Oil prices rise on doubts US-Iran peace talks will ease Hormuz disruption
Impact of Middle Eastern Tensions on Global Oil Markets
By Shariq Khan and Shadia Nasralla
Oil Price Movements and Market Reactions
NEW YORK, April 16 (Reuters) - Oil prices rose on Thursday on skepticism that forthcoming peace talks between the U.S. and Iran would be able to resolve disruptions to Middle Eastern energy supplies caused by the ongoing war.
Brent crude futures climbed $4.46, or 4.7%, to settle at $99.39 a barrel. U.S. West Texas Intermediate crude futures gained $3.40, or 3.7%, to settle at $94.69 a barrel.
Strait of Hormuz Disruption
The U.S.-Israeli war with Iran stands as the largest-ever disruption of global oil and gas supplies due to Iran's interruption of traffic through the Strait of Hormuz, which typically carries about 20% of the world's oil and liquefied natural gas flows. Each day that passes with maritime traffic still effectively shut means oil users worldwide are running down supply - tightening markets.
Analyst Perspectives
"We remain sceptical of any immediate solving of this war," PVM oil market analyst John Evans said. "Pick any headline and there is always a counter."
Peace Talks and Political Developments
U.S. and Iranian negotiators have scaled back their expectations for a comprehensive peace deal and are instead seeking a temporary memorandum to prevent a return to conflict, two Iranian sources told Reuters on Thursday.
By contrast, U.S. President Donald Trump later said the U.S. is very close to a deal with Iran, an assertion he has previously made. Oil benchmarks barely reacted to his remarks.
Oil markets also did not react to Trump's announcement of a 10-day ceasefire between Israel and Lebanon in their related conflict, starting Thursday.
Supply Disruptions and Inventory Impact
The supply disruptions are straining global oil inventories, particularly for jet fuel in parts of Asia and Africa.
Analysts from ING estimate that roughly 13 million barrels per day of oil flow has been disrupted by the closure of the Strait.
U.S. crude oil inventories fell by 913,000 barrels last week, compared with analysts' expectations for an increase of 154,000 barrels, government data showed on Wednesday. U.S. gasoline and distillate fuel inventories also fell last week as countries seeking to replace Middle Eastern supplies drove U.S. exports higher.
Expert Commentary on Inventory Drawdown
"As of now, there are no bombs falling, but the amount of ships making it through the Strait is no better than it was before the U.S. Blockade, which just adds to global draw on stocks that finally showed up in the U.S. this week," Scott Shelton, analyst at TP ICAP, said.
Possible Resumption of Peace Talks
U.S. and Iranian officials were considering returning to Pakistan for further talks as early as the coming weekend.
Potential Outcomes and Ongoing Risks
A source briefed by Tehran told Reuters that Iran could consider allowing ships to sail freely through the Omani side of the Strait of Hormuz in the event of a deal to prevent renewed conflict after a two-week ceasefire started on April 8.
With the U.S. blockade on Iranian ports announced after the collapse of peace talks over the weekend, the disruption could increase, although some U.S.-sanctioned tankers have made it through.
Sanction Policies and Future Implications
U.S. Treasury Secretary Scott Bessent said that Washington will not be renewing sanction waivers for some Iranian and Russian oil.
(Reporting by Shariq Khan and Shadia Nasralla; Additional reporting by Stephanie Kelly in London, Yuka Obayashi in Tokyo and Siyi Liu in Singapore; Editing by Lincoln Feast, Christian Schmollinger, Thomas Derpinghaus, Barbara Lewis, Jane Merriman, and David Gaffen)
