Brent declines amid hopes of renewed ceasefire talks

The front-month ICE Brent contract has lost by $2.83/bbl on the day, to trade at $95.38/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent’s price has felt some upward pressure after US Central Command (CENTCOM) said a blockade of Iranian ports bas been fully implemented.

No vessels have made it past the US blockade since yesterday, the US CENTCOM said, adding that six 6 merchant vessels “complied with direction from U.S. forces” to turn around to re-enter an Iranian port on the Gulf of Oman.

“Vessel transits via the Strait of Hormuz could come to a complete halt, as Iran may strive itself to block any other transits,” remarked tanker tracking firm Vortexa’s senior market analyst Xavier Tang.

Downward pressure:

Brent’s price has moved lower on hopes of renewed ceasefire talks between the US and Iran.

Both parties are arranging a second round of talks in the coming days before the two-week ceasefire agreement expires, Bloomberg reported.

Iran is considering pausing its oil shipments through the Strait of Hormuz, following the US blockade of the vital waterway, according to ANZ Bank’s senior commodity strategist Daniel Hynes.

“This would ease tensions and possibly pave the way for more constructive talks,” Hynes said.

Prices came under further downward pressure after the American Petroleum Institute (API) reported a 6.1 million bbls increase in US crude inventories.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

By Aparupa Mazumder

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