Crude oil prices ticked higher today as hopes for a peace deal between the United States and Iran faded further, after President Trump called Iran’s response to a U.S. peace deal proposal “garbage”. Iran’s response included a list of demands that the U.S. side has previously found unacceptable.
At the time of writing, Brent crude was trading at $104.86 per barrel, with West Texas Intermediate at $98.93 per barrel.
The ceasefire between Washington and Tehran was “on life support”, the U.S. president said, as quoted by Reuters, adding that “I would call it the weakest right now, after reading that piece of garbage they sent us. I didn’t even finish reading it.”
The news comes as Trump heads for China to meet President Xi, after the U.S. Treasury imposed new sanctions on entities involved in the sale of Iranian oil to Chinese refiners in violation of U.S. sanctions on Tehran.
Meanwhile, the supply crunch continues, with a Reuters survey suggesting OPEC production fell by 830,000 barrels daily last month to a daily average of 20.04 million barrels, despite the UAE’s and Saudi Arabia’s efforts to reroute oil flows to export terminals outside the Strait of Hormuz.
On the demand side, meanwhile, FGE NexantECA said destruction could amount to 4 million barrels daily for the second quarter of the year. “Following strong growth in global oil demand during the first two months of the year, we forecast global oil demand in 2Q 2026 to decline by over 4 mmb/d y-o-y as the impact of the war feeds through to the economy,” the firm said.
The Middle East crisis is sending ripples across the global economy, raising fuel prices everywhere, including in the United States, where the national average on Monday hit $4.51 per gallon, prompting discussions of the temporary suspension of the federal fuel tax.
By Irina Slav for Oilprice.com
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