Synopsis
Oil prices fell as President Trump indicated progress in negotiations with Iran and suspended strikes on energy infrastructure. This follows a strong rally amid fears of escalation. Despite diplomatic efforts, the United States deploys troops. Iran demands a complete cessation of attacks and guarantees of peace. Disruptions in the Strait of Hormuz are severe, with analysts predicting continued price volatility.
ETMarkets.comOil prices fell Friday after President Trump indicated progress in negotiations with Iran and a temporary halt to strikes on its energy infrastructure.
Oil price slipped in Friday morning trade, ending a volatile week, after U.S. President Donald Trump reported progress in negotiations with Iran to end the ongoing conflict and announced a 10-day pause in strikes targeting the country’s energy infrastructure.
The decline follows a strong rally in the previous session, when Brent jumped 5.7% and WTI 4.6% on growing concerns about further escalation. Despite these strong increases, trading activity on the front-month Brent contract remained subdued, with volumes reaching their lowest level since February 27, just before the United States and Israel launched strikes against Iran.
Crude oil prices on March 27
Brent Futures fell 90 cents, or 0.8 percent, to $107.11 a barrel by 0024 GMT, while U.S. West Texas Intermediate (WTI) fell 83 cents, or 0.88 percent, to $93.65 a barrel, giving up some of the gains seen in the previous session.
Despite the recent rise, Brent is on track for its first weekly decline in six weeks, while WTI is on track for a second consecutive weekly loss, as Trump continues to highlight the possibility of a resolution to the war.
In a post on Truth Social on Thursday, Trump said: “In accordance with the request of the Iranian government…I am suspending the period of destruction of the energy plant for 10 days until Monday, April 6, 2026, at 8 p.m. Eastern Time.” »
Meanwhile, the Pentagon is preparing to deploy thousands of troops from the U.S. Army’s 82nd Airborne Division to the Middle East, according to two sources cited by Reuters, in a sign of a continued military buildup even as diplomatic efforts are underway.
Iran has outlined a set of conditions for ending the conflict, saying the first condition is a complete cessation of attacks and assassinations. He called for firm guarantees to prevent any resurgence of the war, as well as a clear mechanism to assess and guarantee compensation for war-related damages. Tehran also stressed that hostilities must cease not only against Iran but also against resistance groups throughout the region.
The conflict has seriously disrupted flows across the Strait of Hormuzwhich typically handles about a fifth of the world’s crude oil and LNG shipments. The head of the International Energy Agency, Fatih Birol, described the situation as more serious than the oil shocks of the 1970s combined with the impact on the gas market of the war between Russia and Ukraine.
What’s next?
International brokerage Macquarie said that even if tensions ease in the short term, oil prices are likely to find support in the $85-$90 range, with a gradual return towards $110 until normal flows resume through the Strait of Hormuz. The note adds that if disruptions persist into April, Brent could further rise to $150 per barrel.
In the future, crude prices may increase from current levels. According to Kayanat Chainwala of Kotak Securities, oil could reach $120 a barrel in the near term and potentially hit $150 if the conflict continues.
Nuvama Institutional Equities echoes the same view. The continued closure of the Strait of Hormuz, which processes about 20 million barrels per day, could push crude prices into the $110-$150 per barrel range.
(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)
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