Oil prices fell on Tuesday on expectations of peace talks between the U.S. and Iran this week which could allow for more supply to flow from the region.<\/p>\n
Peresmeh | E+ | Getty Images<\/p>\n
Oil\u00a0prices fell on Tuesday, reversing gains in the previous session, on expectations peace talks between the\u00a0U.S. and Iran\u00a0will take place this week and allow more supply to flow from the key Middle East producing region.<\/p>\n
Brent futures<\/a>\u00a0declined 95 cents,\u00a0or 1%, at $94.53, as of 0003 GMT.\u00a0U.S. West Texas Intermediate (WTI)\u00a0crude\u00a0futures<\/a> for May fell $1.54,\u00a0or 1.72%, to\u00a0$88.07.\u00a0The May contract expires on Tuesday and the more-active June contract was down $1.09, or 1.3%, at $86.37.<\/p>\n Both benchmarks surged on Monday, with Brent up 5.6% and WTI up 6.9%, after Iran again shut the Strait of Hormuz, closing the key\u00a0oil\u00a0transport artery, and the U.S. seized an Iranian cargo ship as part of its blockade of the country’s ports.<\/p>\n Still, investors are focusing on the likelihood talks this week will result in the extension of the existing ceasefire or a final agreement, though the chance of further conflict and disruptions to\u00a0oil\u00a0flows remains.<\/p>\n Iran is weighing participation in the\u00a0peace talks\u00a0in Pakistan, a senior Iranian official told Reuters on Monday, following Islamabad’s efforts to end the U.S. blockade.<\/p>\n The blockade has posed a major hurdle to Tehran rejoining peace efforts, with the current two-week ceasefire set to expire this week.<\/p>\n “We continue to lean toward an MOU being signed and\/or the ceasefire being extended this week, potentially evolving into a broader agreement,” analysts at Citi said in a note. “That said, we remain prepared to pivot toward a more protracted disruption scenario should negotiations falter this week.”<\/p>\n Underscoring the uncertainty around the talks, the Iranian official stressed that no decision has been made to attend, as Iranian Foreign Minister Abbas Araqchi said “continued violations of the ceasefire” by the U.S. is a hindrance to further negotiations.<\/p>\n Separately, Iran’s top negotiator and parliament speaker Mohammad Baqer Qalibaf\u00a0reiterated\u00a0that Tehran would not negotiate under threats.<\/p>\n Shipping activity through the Strait of Hormuz, an essential corridor for about one-fifth of the world’s\u00a0oil\u00a0supply,\u00a0remained limited\u00a0on Monday.<\/p>\n If disruptions to the strait persist for another month, total losses could rise to about 1.3 billion barrels, with prices likely near $110 a barrel in the second quarter of 2026, Citi said.<\/p>\n Kuwait declared force majeure on\u00a0oil\u00a0shipments due to the strait’s blockade, Bloomberg News\u00a0reported.<\/p>\n The higher prices caused by the closure of the strait have cut\u00a0oil\u00a0demand by about 3% so far, analysts at Societe Generale said in a client note.<\/p>\n The risk is “skewed toward larger losses the longer normalization is delayed,” it said, adding it expects “full normalization” to supply only by late 2026.<\/p>\n