April 21 (Reuters) - U.S. crude futures fell nearly 2% in early Asian trade on Tuesday as investors reassessed supply risk, with uncertainty over U.S.–Iran peace talks persisting ahead of a key
Brent futures retreat on Iran ceasefire extension after brief climb above $100
Oil Market Reactions and Global Impacts
By Scott DiSavino
Brent and WTI Price Movements
NEW YORK, April 21 (Reuters) - Oil prices pared gains on Tuesday after briefly climbing above $100 a barrel following an announcement from U.S. President Donald Trump that he was extending a ceasefire with Iran until Tehran submits a proposal.
Brent crude futures were volatile, settling up about 3% on Tuesday and then climbing further to rise more than 5% to a session high of $101.15 after reports that U.S. Vice President JD Vance had called off his trip to Islamabad for peace talks with Iran.
Prices later retreated after Trump said the ceasefire would remain in place until Iranian leaders present what he called a unified proposal and talks are concluded, though he said the U.S. naval blockade of Iran would continue.
Earlier, Iran said it had yet to decide whether to attend peace talks with the United States, and it had yet to comment on Trump's announcement.
Brent futures were up $4.22, or 4.4%, at $99.67 a barrel in post-settlement trading on Tuesday. U.S. West Texas Intermediate crude settled up $2.52, or 2.8%, at $92.13.
Shipping and Supply Chain Disruptions
Shipping traffic through the Strait of Hormuz, which normally handles about 20% of global oil and liquefied natural gas supplies, remained broadly halted on Tuesday with only three ships passing through the waterway in the past 24 hours, shipping data showed.
"You've already at this point lost a billion barrels, even if this resolves tomorrow. If it's another month, it's 1.5 billion barrels," Saad Rahim, chief economist at commodity trader Trafigura, said at the FT Global Commodities Summit.
Middle East Tensions and Broader Effects
Regional Conflicts and Ceasefire Violations
Elsewhere in the Middle East, the Israeli military said Hezbollah fired rockets at Israeli troops in southern Lebanon, accusing the Iran-backed group of violating a ceasefire ahead of U.S.-mediated talks between the Israeli and Lebanese governments this week. There was no immediate comment from Hezbollah.
European and Global Fuel Supply Concerns
As concerns about jet fuel supplies grow, the European Union's transport chief said the bloc would provide guidance to airlines on how to handle issues such as airport slots, passenger rights and public service obligations in the event of shortages because of the Iran war.
German Economy Minister Katherina Reiche said jet fuel supplies are not in danger as refineries adapt to increased demand, but added the government is monitoring the situation.
Russian Supplies and Economic Impacts
Russian Oil Exports and Pipeline Updates
RUSSIAN SUPPLIES
Ukrainian President Volodymyr Zelenskiy said the Druzhba oil pipeline pumping Russian oil to Europe is ready to resume operations, signaling Ukraine now expects a 90 billion euro ($106 billion) aid package to be unblocked. Three industry sources, however, said Russia is set to stop oil exports from Kazakhstan to Germany via the Druzhba pipeline starting on May 1.
Russia's energy ministry did not immediately reply to a request for comment. Kremlin spokesman Dmitry Peskov said he was not aware of a move to stop the oil exports.
Economic Sentiment in Europe and the US
In Germany, the biggest economy in Europe, investor morale declined to its lowest level in more than three years in April as businesses started to feel the economic consequences of the Iran war far beyond price increases, the ZEW economic research institute said.
In the United States, retail sales increased more than expected in March as the war in Iran boosted gasoline prices and led to a record surge in receipts at service stations, while tax refunds underpinned spending elsewhere.
US Oil Storage and Inventory Reports
Awaiting EIA Data
US OIL STORAGE REPORTS AWAITED
Those crude price increases came as the market waited for direction from the U.S. Energy Information Administration on Wednesday.
API and Analyst Inventory Estimates
U.S. crude oil inventories fell after three straight weeks of gains, while gasoline and distillate stocks also declined, market sources said, citing American Petroleum Institute figures on Tuesday.
Crude stocks fell by 4.5 million barrels in the week ended April 17, the sources said on condition of anonymity.
Analysts projected that energy firms pulled 1.2 million barrels of crude from storage during the week ended April 17.
Gasoline inventories fell by 5.2 million barrels, while distillate inventories fell by 4.6 million barrels compared to a week earlier, the sources said.
Currency Exchange Rate
($1 = 0.8516 euros)
(Reporting by Scott DiSavino and Siddharth Cavale in New York, Seher Dareen in London, Anmol Choubey in Bengaluru and Emily Chow in Singapore; Editing by Nick Zieminski, Lisa Shumaker and Jamie Freed)
