Oil Remains Stable But Elevated As US-Iran Prepare For Peace Talks Amid Fragile Ceasefire

Oil prices remained stable but elevated on Friday as the two-week ceasefire agreement between the United States and Iran remained under pressure from Israel-Lebanon tensions.

While the global benchmark Brent Crude was marginally up by 0.8 percent during Asian trade hours, WTI Crude was 0.6 percent higher than the previous close.

Brent Crude was hovering around $96 per barrel, while WTI Crude remained above the $98 per barrel mark.

The range-bound movement in prices on Friday was a result of uncertainty about the future of the ceasefire agreement brokered on Wednesday. Crude has declined about 15 percent (from $114) since the ceasefire agreement.

While Israel has continued attacks on Hezbollah rebels in Lebanon, US President Donald Trump is furious over Iran still not opening the Strait of Hormuz even as the two sides are set to meet in Pakistan’s Islamabad for peace talks.

“Iran is doing a very poor job, dishonorable some would say, of allowing oil to go through the Strait of Hormuz. That is not the agreement we have!,” he said in a social media post

According to a report by the BBC, at least nine ships passed through the strait on April 9, compared to an average of 138 ships each day before the war.

Moreover, Saudi Arabia has confirmed that recent attacks on the country have slashed its oil production capacity by about 600,000 barrels per day.

Iran had attacked Saudi Arabia’s East-West oil pipeline yesterday. The pipeline was being used by the kingdom as an alternative to the Strait of Hormuz.

These developments have dented the sentiment of traders who were rushing to the Gulf in order to replenish reserves within the two-week window.

“Coordination with Iranian armed forces is still required for all transits,” maritime intelligence firm Windward was quoted as saying in a report by Oilprice.com. “The strait has not reopened — it is in a supervised pause,” the intelligence firm noted.

The ceasefire and the peace deal hinge upon the status of the Strait of Hormuz as it is crucial to maintaining energy supplies to the world.