Oil prices were mixed on Tuesday after reports that the United States had sent Iran a 15-point plan to end the war in the Middle East.
Brent futures went down by $0.83 or 0.9 per cent to $99.11 a barrel, while the US West Texas Intermediate climbed $4.22 or 4.79 per cent to $92.35 per barrel.
President Donald Trump said on Tuesday that the US and Iran were “in negotiations right now” and suggested Tehran was eager to make a peace deal, even as the Islamic Republic denied it’s in direct talks with America.
President Trump, speaking in the Oval Office, said he decided to back off from his recent threat to order strikes on Iranian energy infrastructure
According to reports, the plan includes a one-month ceasefire to be announced, according to a mechanism that US Middle East envoys Steve Witkoff and Jared Kushner are working on.
The Strait of Hormuz was handling about 20 per cent of global seaborne oil supplies until the war broke out, before Iran virtually stopped flows via the critical waterway. With around a fifth of the world’s daily oil supply cut off by the Middle East war, prices are still more than 40 per cent higher than they were when the conflict erupted in late February.
The United Arab Emirates (UAE), which has seen its liquified natural gas (LNG) and most oil supply choked at the vital chokepoint, said Iran’s weaponisation of the energy and trade flows amounts to economic terrorism against every nation in the world.
Since the US-Israel strikes on Iran began on February 28, the daily traffic of over 100 vessels, including tankers, through the Strait of Hormuz, has slowed to a trickle of a handful of passages per week, all cargoes apparently approved for transit by Iran.
Iranian state media said that Iran would permit safe transit through the strait, except for ships associated with its “enemies.”
Amid the messaging clash between the US and Iran on negotiations, multiple outlets have reported that regional leaders are engaged in behind-the-scenes diplomatic efforts to help broker an end to the war.
The American Petroleum Institute (API) estimated that crude oil inventories in the US rose by 2.3 million barrels in the week ending March 20. Official data from the Energy Information Administration (EIA) will be released later on Wednesday.