Oil prices declined for a second consecutive day on Wednesday, April 15, amid expectations that US-Iran peace talks could resume, potentially easing supply constraints from the key Middle East region affected by the Strait of Hormuz closure.
Brent crude futures slipped 52 cents, or 0.55%, to $94.27 a barrel, following a 4.6% drop in the previous session. Meanwhile, US West Texas Intermediate crude fell $1.04, or 1.1%, to $90.24 after plunging 7.9% a day before.
Back home, crude oil prices on the Multi Commodity Exchange (MCX) also witnessed a similar movement. MCX crude oil prices fell by over a per cent to ₹8,495 per barrel.
Why are crude oil prices falling?
According to a Reuters report, US President Donald Trump said on Tuesday that discussions to end the conflict involving the US, Israel, and Iran could resume in Pakistan within the next two days.
This comes after weekend negotiations collapsed, prompting Washington to impose a blockade on Iranian ports. The development has raised hopes that renewed talks could eventually resolve the conflict and restore crude oil and fuel supplies.
The conflict has led to the closure of the Strait of Hormuz, a crucial route for transporting crude and refined products from the Gulf to global markets, especially in Asia and Europe.
Although a two-week ceasefire is in place, movement through the strait remains uncertain. Traffic is currently only a fraction of the roughly 130 vessels that used to pass through the waterway before the conflict, sources were quoted as saying by Reuters.
In an effort to intensify pressure on Tehran, the Trump administration has decided to let a temporary waiver—allowing the purchase of certain Iranian crude—lapse this weekend, the Treasury Department said.
Crude oil price outlook in the near-term
Dilin Wu, a research strategist covering cross-asset markets at Pepperstone Group, was quoted as saying by Reuters that oil is likely to move sideways with a softer bias, as the market digests the shift toward diplomacy in the near term.
“However, even if geopolitical tensions ease at the margin, any meaningful recovery in physical supply will lag,” with logistical bottlenecks off Hormuz keeping a floor under prices,” Wu said.
On the other hand, Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, said that crude oil markets are clearly transitioning from a geopolitical risk premium to a more balanced, two-sided structure as ceasefire conditions between Iran, United States, and Israel.
“WTI now finding strong support near $85 and Brent around $90, while $105 remains a critical resistance for both benchmarks—any break above that level would likely require fresh escalation, whereas a sustained move below $90 Brent and $85 WTI would signal meaningful de-escalation,” Banerjee said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
