The oil market was down more than $3 on Tuesday following reports that Iran’s president said the country was ready to end the war that has affected the global markets.
Brent crude depreciated by $3.42 to $103.97 per barrel, while the US West Texas Intermediate (WTI) crude lost $1.50 or 1.46 per cent to trade at $101.38 per barrel.
For Brent, it has steadily risen over the last four weeks as the Iran war has escalated, with attacks across energy infrastructure throughout the Gulf that have resulted in the worst-ever oil-and-gas supply disruption.
However, on Tuesday, Iran’s president, Mr Masoud Pezeshkian, suggested the Islamic Republic is open to ending the war if certain conditions are met.
“We possess the necessary will to end this conflict, provided that essential conditions are met, especially the guarantees required to prevent repetition of the aggression,” Mr Pezeshkian said in a phone conversation with the president of the European Council, according to a statement from his office.
The comments followed that of US Secretary of Defence Pete Hegseth, who said that the next days of the Iran war will be “decisive” while refusing to rule out US ground forces playing a role in the conflict.
In March, the market moved up and down each time US President Donald Trump suggested the military operation may be de-escalated – only to resume its upward path due to the supply impairment caused by Iran’s threats against vessels transiting the key Strait of Hormuz, the artery used to ship one-fifth of the world’s oil and gas.
Iran’s Islamic Revolutionary Guard Corps (IRGC) is only allowing vessels flying flags of “friendly” countries to transit, as traffic through the Strait of Hormuz has collapsed from more than 100 ships transiting every day to fewer than 10 per day, most of which are with critical supplies bound for China, India, and Pakistan.
President Trump has suggested other countries should intervene to open the strait, a move European nations have not wanted to take until hostilities cease.
Meanwhile, the US has removed sanctions on barrels from Russia and pledged reserve releases with a group of other nations, but those measures will only offset the supply loss for a limited period of time.
The American Petroleum Institute (API) estimated that crude oil inventories in the US rose by a staggering 10.263 million barrels in the week ending March 27. Official data from the US Energy Information Administration (EIA) will be released later on Wednesday.