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Oil prices steadied after declining nearly 8% in the prior session as the US and Iran weighed a new proposal to end the West Asia war.
Brent traded over $102 a barrel, while West Texas Intermediate was close to $96 a barrel.
Washington has presented a one-page memorandum of understanding that will potentially lead to the gradual reopening of the Strait of Hormuz, a person familiar with the matter said, news agency Bloomberg reported. Iran is expected to respond in coming days.
Global energy markets have been upended by the war, with the vital shipping route largely closed since the end of February. At present, the chokepoint faces a double blockade, with Tehran obstructing traffic, while the US Navy prevents vessels calling at or leaving Iranian ports to squeeze the nation’s oil industry. Shipowners remain cautious, with the strait still virtually empty.
The US will end its military campaign and lift its blockade “assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption,” President Donald Trump posted on social media on Wednesday, without giving details. “If they don’t agree, the bombing starts.”
The American president is under pressure to bring the war to a close as US retail energy prices surge, fanning voters’ concerns about affordability. In addition, Trump and Chinese President Xi Jinping are due to hold a summit in Beijing on May 14-15. This week, China’s top diplomat called for the swift reopening of Hormuz in a meeting with his Iranian counterpart.
The latest US proposal came after Trump suspended a short-lived mission to offer safe passage for ships through Hormuz. Detailed talks over Iran’s nuclear program — an issue central to Washington’s reasons for the war — would come later, the person familiar said, adding nothing has yet been agreed.
Meanwhile, US government data showed exports of oil products rose to a record last week as the country became a key supplier of fuel to the world amid the supply crunch caused by the conflict. Crude inventories fell.
With inputs from Bloomberg
Brent traded over $102 a barrel, while West Texas Intermediate was close to $96 a barrel.
Washington has presented a one-page memorandum of understanding that will potentially lead to the gradual reopening of the Strait of Hormuz, a person familiar with the matter said, news agency Bloomberg reported. Iran is expected to respond in coming days.
Global energy markets have been upended by the war, with the vital shipping route largely closed since the end of February. At present, the chokepoint faces a double blockade, with Tehran obstructing traffic, while the US Navy prevents vessels calling at or leaving Iranian ports to squeeze the nation’s oil industry. Shipowners remain cautious, with the strait still virtually empty.
The US will end its military campaign and lift its blockade “assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption,” President Donald Trump posted on social media on Wednesday, without giving details. “If they don’t agree, the bombing starts.”
The American president is under pressure to bring the war to a close as US retail energy prices surge, fanning voters’ concerns about affordability. In addition, Trump and Chinese President Xi Jinping are due to hold a summit in Beijing on May 14-15. This week, China’s top diplomat called for the swift reopening of Hormuz in a meeting with his Iranian counterpart.
The latest US proposal came after Trump suspended a short-lived mission to offer safe passage for ships through Hormuz. Detailed talks over Iran’s nuclear program — an issue central to Washington’s reasons for the war — would come later, the person familiar said, adding nothing has yet been agreed.
Meanwhile, US government data showed exports of oil products rose to a record last week as the country became a key supplier of fuel to the world amid the supply crunch caused by the conflict. Crude inventories fell.
With inputs from Bloomberg
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