Oil prices ease on hopes of Iran-US ceasefire talks

Oil prices edged lower on signs that Iran may attend negotiations with the United States in Islamabad ahead of the expiry of a ceasefire between the two sides.

Brent crude fell as much as 1.1% to $94.44 a barrel after rising 5.6% on Monday, News.Az reports, citing Bloomberg.

Iran is reportedly sending a team to the Pakistani capital, according to people familiar with the matter who declined to be identified, although it remains unclear who will lead the delegation.

Earlier, Tehran had indicated hesitation about participating in further peace talks with the United States.

US Vice President JD Vance is scheduled to depart later on Monday to resume negotiations “either Tuesday night or Wednesday morning,” President Donald Trump said in a phone interview on Monday. Trump also said it is “highly unlikely” that he would extend the truce, which is set to expire on Wednesday evening Washington time.

Oil markets have experienced sharp swings in recent days due to rapidly changing expectations over the negotiations and uncertainty about shipping access through the Strait of Hormuz, a key route through which about one-fifth of global crude oil supplies pass. The ongoing standoff over the strait has raised concerns about a deepening global energy crisis and remains one of several unresolved issues between Iran and the United States, alongside Tehran’s nuclear programme and Israel’s military actions in Lebanon.

During Monday’s trading session, conflicting statements from Trump regarding the timing and prospects of peace talks added further volatility. Oil prices briefly extended gains after he stated that the US would continue restricting passage for Iran-linked ships through the strait until a final agreement is reached.

At the same time, shipping through the Strait of Hormuz has nearly stalled, with only three vessels attempting passage early Tuesday. The situation escalated over the weekend after the US Navy seized an Iranian vessel, while Iranian forces reportedly fired on ships and reimposed control measures across the waterway.

On Monday, Chinese President Xi Jinping called for an immediate ceasefire and the restoration of normal transit through the strait, according to a readout from China’s Foreign Ministry following a phone call with Saudi Crown Prince Mohammed bin Salman.

Analysts warn that oil prices could rise to $110 per barrel if disruptions in the waterway persist for another month, according to Citigroup Inc. Meanwhile, International Energy Agency Executive Director Fatih Birol said global energy markets could remain volatile for up to two years due to the conflict.

News.Az 

By Nijat Babayev