Meanwhile, the IEA sees a contraction of oil demand this year: File Image/Pixabay
Oil eked out minimal gains on Wednesday amid the numbing effects on sentiment of the impasse in the U.S./Iran peace talks, as well as further attacks on vessels transiting both the Strait of Hormuz and the Bab el-Mandeb straits.
The Iran-aligned Houthis were responsible for separate attacks in both straits (with the Bab el-Mandeb strike killing six people), and this combined with data showing that transits through the Hormuz fell to eight on Tuesday compared to pre-war numbers of 125-140 vessels maintained these regions as a major source of analytical concern.
As for the talks, which to hawks always seemed like a hopeless diplomatic exercise, a senior Iranian source told Reuters there were no discussions between Iran and the U.S. to extend their ceasefire because, from Tehran’s perspective, the deal had no start date and so there was nothing to extend.
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Optimism…is steadily being replaced by a more cautious, risk-premium-driven stance
Tim Waterer, chief market analyst, KCM Trade
As a result, Brent settled up 7 cents to $88.98 per barrel, and West Texas Intermediate also settled up 7 cents to $83.27.
Additionally, oil demand outlooks were revised downward by the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency, the latter of which predicted a 1.6 million barrel per day (bpd) contraction this year.
The IEA also predicted a 4.3 million bpd drop in supply for 2026.
However, Iran remained the chief focus of analytical thought, and Tim Waterer, chief market analyst at KCM Trade, said, “Optimism from earlier in the month is steadily being replaced by a more cautious, risk-premium-driven stance.”
Waterer went on to remark that “The longer talks drag on without visible progress, and the more complex the reported demands become, the greater the scepticism that a workable agreement can be reached quickly.”
Ship & Bunker News Team
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