Oil prices steady as traders track report of push for Iran ceasefire

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SINGAPORE – Oil steadied as traders tracked a report of a diplomatic push for a ceasefire in the Middle East, after US President Donald Trump had announced a fresh ultimatum on Iran if the Strait of Hormuz was not reopened.

Brent crude, the global oil benchmark, traded below US$110 a barrel, shedding most of an early gain, while West Texas Intermediate was near US$111.

The United States, Iran and regional mediators were discussing terms for a potential 45-day pause that could lead to a permanent end to the war, Axios reported, citing sources with knowledge of the talks.

The crude market has been pitched into turmoil by the war, which triggered an unprecedented supply shock that is morphing into a global energy crisis. Oil and product prices have soared, stoking inflationary pressures, undermining economic growth and piling pressure on businesses and consumers.

At the weekend – before the Axios report – Mr Trump threatened in a series of social-media posts to bring “Hell” to Iran with strikes on power plants and other civilian infrastructure if Hormuz was not reopened. Tehran rejected the demands, and the waterway remains closed to all but a small number of vessels.

Investors have been rattled by Mr Trump’s frequently contradictory messaging on the conflict, with the US leader oscillating between occasional claims that the war would soon be over and threats to step up attacks, including against civilian infrastructure. At the same time, he has a history of setting self-imposed deadlines that he subsequently does not keep.

Mr Trump said he plans to hold a news conference at 1pm on April 6 and also posted about an April 7, 8pm Eastern Time deadline, without offering any details about what he meant. On March 26, Mr Trump gave Iran a 10-day deadline to reopen the Strait of Hormuz, which would expire on the evening of April 6.

“On the face of it, the war has entered another sharp escalatory phase, which is bullish,” said Ms Vandana Hari, founder of Vanda Insights in Singapore. Still, “the expectation of a massive and quick price correction in the event of a resolution creates a hesitancy to add too much length at this stage”.

OPEC+ warned after a weekend meeting that damage to energy assets from the war would have a prolonged impact on oil supply even after hostilities ended. Members of the producers’ group approved an increase in output quotas – a signal of intent, given oil exports from the Persian Gulf remain throttled.

Heading into the long Easter weekend, there were signs of acute tightness in the physical crude market. Dated Brent, the price of shipments bought and sold in the North Sea, and the world’s most important price for real-world barrels, surged above US$140 to the highest since 2008.

Control of the strait – which connects the Persian Gulf to wider markets, especially across Asia – remains central to the conflict. Tehran has imposed its authority over the waterway, permitting just a small number of vessels to pass through, including, in recent days, a French container ship and Japanese-owned tanker, as well as vessels from Malaysia and Pakistan.

Iran did announce on April 4 that Iraq would be exempt from its curbs in the strait, potentially allowing a pick-up in oil cargoes. Still, an Iraqi official struck a cautious note, saying the outflow would depend on whether shipping companies are willing to risk entering the trade artery.

The Foreign Ministry in Oman, which sits across the strait from Iran, said in a post on X on April 5 that it discussed with Iran options to ensure “smooth flow” through the waterway. Both sides presented proposals for study, it said. BLOOMBERG