US-Iran war: Oil prices slipped on Tuesday, 21 April, erasing some gains recorded in the previous session, amid expectations that the upcoming peace talks between the US and Iran could ease tensions and boost oil supply from the crucial Middle East.
Brent crude futures dropped 95 cents, or 1%, to $94.53 as of 0003 GMT. US West Texas Intermediate (WTI) crude for May declined $1.54, or 1.72%, to $88.07. The May contract is set to expire on Tuesday, while the more actively traded June contract fell $1.09, or 1.3%, to $86.37.
Back home, crude oil prices on Multi Commodity Exchange (MCX) witnessed a similar movement, as they fell by over 0.72% to ₹8,127 per barrel.
Oil benchmarks had rallied sharply on Monday, with Brent crude climbing 5.6% and WTI rising 6.9%, after Iran once again closed the Strait of Hormuz—a critical route for global oil shipments—and the US seized an Iranian cargo vessel as part of its port blockade.
Why are crude oil prices falling today?
Market participants are closely watching diplomatic developments, hoping that talks scheduled this week could either extend the current ceasefire or lead to a lasting agreement. However, concerns over renewed conflict and potential disruptions to oil supply persist.
According to a Reuters report, Tehran is considering joining peace negotiations in Pakistan, following Islamabad’s push to resolve the standoff and end the US blockade.
The blockade remains a significant obstacle to Iran’s return to peace discussions, especially with the existing two-week ceasefire due to expire later this week.
A Bloomberg report revealed that US Vice President JD Vance was set to depart later on Monday to continue negotiations, which Donald Trump said could resume “either Tuesday night or Wednesday morning” during a phone interview. The US president added that extending the truce—due to expire on Wednesday evening, Washington time—is “highly unlikely.”
Can crude oil prices rise to $110/bbl?
According to Citigroup, as quoted by Bloomberg, oil prices could climb to $110 per barrel if disruptions in the waterway persist for another month.
“If disruptions to the strait persist for another month, total losses could rise to about 1.3 billion barrels, with prices likely near $110 a barrel in the second quarter of 2026,” the global firm said.
Meanwhile, Ponmudi R, CEO of Enrich Money, said US oil is currently trading above $87, having appreciated from lows near $80, underpinned by ongoing geopolitical developments.
“A sustained move above the $90 level would signal further upside momentum, with the rally likely accelerating toward the $92–$95 target range. On the downside, a decisive break below $85 would shift the near-term structure bearish, exposing the $83 level. The near-term bias remains bullish,” Ponmudi said.
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