Oil prices surged nearly 3% on Tuesday, influenced by Iran’s indecision regarding participation in peace talks with the U.S. as a ceasefire deadline approaches. Brent crude rose by $3 to $98.48 per barrel, while U.S. West Texas Intermediate increased by $2.52 to $92.13. Gains were tempered after reports indicated U.S. Vice President JD Vance had not yet departed for Islamabad to lead negotiations.
Shipping traffic through the Strait of Hormuz, a key route for global oil, remained largely halted, with only three vessels reported in the past 24 hours. Trafigura’s chief economist noted significant losses in oil supply could result from prolonged conflict, estimating a potential loss of up to 1.5 billion barrels if the situation continues for another month.
In related developments, the Israeli military accused Hezbollah of violating a ceasefire by firing rockets at Israeli forces, coinciding with upcoming U.S.-mediated talks. Meanwhile, the EU is preparing guidelines for airlines in case of jet fuel shortages due to the Iran conflict, although Germany’s economy minister assured that jet fuel supplies remain stable.
As the U.S. awaits key crude oil storage reports, analysts expect a pull of 1.2 million barrels, marking a significant shift in storage trends compared to previous years.
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