(RTTNews) – Crude oil prices fell on Friday as an end to hostilities in the Gulf appeared more likely, while the Strait of Hormuz remains closed, disrupting crude supplies.
WTI crude oil for delivery in June was last seen trading at $101.79 per barrel, down $3.28 (or 3.28%).
The war between the US and Iran (now in the extended ceasefire phase) that began on February 28 is now in its third month.
Since the beginning of the war, which was initiated by the US to curb Iran’s nuclear ambitions, Iran has effectively closed the Strait of Hormuz through which about 20% of oil and energy transit occurs.
Last week, after canceling the second round of peace talks with Iran, US President Donald Trump announced that Iran can call the US with any peace plan and commented that there is no need for direct talks.
Despite ordering a two-week ceasefire on April 7 and then extending it indefinitely on April 22, Trump ordered a naval blockade of all ships entering or exiting Iran’s ports.
Trump refused to lift the blockade unless Iran agreed to shut down its nuclear programs. Iran, for its part, has refused to reopen the Strait of Hormuz until the US withdraws its naval blockade.
The impasse resulted in oil prices rising higher and higher due to supply disruptions, leading to ever-increasing inflation concerns, forcing major banks around the world, including the US Federal Reserve, to reduce any interest rates.
Earlier on Monday, Trump rejected a draft plan from Iran that sought to postpone discussions on Iran’s nuclear plans to a later date.
On Wednesday, Trump urged Iran to work unitedly and come up with a peace resolution soon.
Trump also posted a photo of himself holding a gun and wrote in the caption, “No more Mr. Nice Guy”, indicating that the US is unwilling to compromise on its demands.
Reports indicate that the US Central Command briefed Trump about its readiness to launch a new wave of strikes on Iran, if necessary, to wrest control of the Strait of Hormuz from Iran.
Iran threatened a strong retaliatory attack. Iran’s outgoing Supreme Leader Mojtaba Khamenei issued a message confirming that Iran will not give up its control over the Strait of Hormuz and will not abandon its nuclear plans.
While mutual verbal spats between the US and Iran continued, oil prices kept rising higher and higher.
Today, Iran’s state news agency IRNA reported that Iran has sent a new proposal for talks through Pakistani mediators.
Investors appreciated the development, which indicated positivity amid continued growth and, as a result, oil prices fell sharply.
Recently, the International Energy Agency said that the world is losing about 13 million barrels of oil per day since the Strait of Hormuz is effectively closed.
Energy experts want a quick resolution to the war as they warn that even if the strait reopens in the coming days, output could remain below pre-war levels throughout the year due to production delays as operations from damaged wells cannot be restarted.
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