Oil prices fell on Tuesday after the White House signaled that a second round of peace talks between the United States and Iran could take place.
American crude oil Futures contracts for May delivery were down nearly 7% at $92.34 a barrel as of 12:17 p.m. ET. International reference Brent for June delivery, it fell 4% to $95.34 per barrel.
The Trump administration plans to continue negotiations with Iran, although nothing is planned, a White House official told CNBC on Tuesday. Vice President JD Vance said Monday that the ball is in Iran’s court after negotiations in Islamabad, Pakistan, failed last weekend.
“Whether we have further discussions, whether we ultimately come to an agreement, I really think the ball is in Iran’s court because we’ve put a lot on the table,” Vance said in an interview with Fox News.
The US Navy launched a “blockade” of Iranian Monday in the ports of the Persian Gulf in order to extract concessions from Tehran.
The blockade “directly endangers” Iranian oil exports through the Strait of Hormuz, which reached around 1.7 million barrels per day last month, according to Vivek Dhar of the Commonwealth Bank of Australia.
“Therefore, the blockade further tightens the physical markets for oil and refined products,” he said.
Oil demand fallingThe International Energy Agency forecast Tuesday that the oil supply shock triggered by the war in Iran will lower demand this year as consumers respond to rising fuel prices.
It expects oil demand to contract by 1.5 million barrels per day in the second quarter, the biggest decline since the Covid-19 pandemic. Demand is expected to fall by 80,000 b/d for the year, a significant change from the IEA’s previous forecast that consumption would rise by 640,000 b/d.
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