Expectations of renewed diplomatic progress weakened over the weekend after Trump cancelled a planned Islamabad visit by his envoys Steve Witkoff and Jared Kushner. This happened even as Iranian Foreign Minister Abbas Araqchi arrived in Pakistan.
Crude oil price on April 28
Brent crude futures for June gained 45 cents, or 0.4%, to $108.68 a barrel after climbing 2.8% in the previous session to their highest close since April 7. The contract has now advanced for seven straight sessions. U.S. West Texas Intermediate (WTI) crude for June rose 58 cents, or 0.6%, to $96.96, following a 2.1% gain in the previous session.Trump’s rejection of the Iranian proposal has left the conflict at a standstill, with Iran restricting shipping through the Strait of Hormuz and the U.S. continuing its blockade of Iranian ports. The waterway normally carries supplies equal to about 20% of global oil and gas consumption.
Iran has continued to insist that vessels obtain its approval before passing through the Strait of Hormuz, while Trump said the U.S. has “total control” over the route. At the same time, the U.S. Navy has maintained its blockade targeting Iranian ports and vessels.
What’s next?
Goldman Sachs raised its fourth-quarter oil price forecasts to $90 a barrel for Brent crude and $83 for WTI, citing reduced Middle East output.“The economic risks are larger than our crude base case alone suggests because of the net upside risks to oil prices, unusually high refined product prices, products shortages risks, and the unprecedented scale of the shock,” Reuters reported, citing Goldman Sachs analysts.
According to a Haitong Futures note cited by Reuters, the current ceasefire phase increasingly appears to be preparation for further conflict. It added that if U.S.-Iran talks fail to make meaningful progress by the end of April and hostilities resume, oil prices could rise to fresh highs for the year.
Macquarie estimates crude prices may remain supported in the $85 to $90 range in the near term, with a gradual move toward $110 as supply conditions improve. It also warned that prolonged disruptions through April could push Brent as high as $150 per barrel.
Nuvama Institutional Equities said an extended closure of the Strait of Hormuz, which handles around 20 million barrels per day, could lift crude prices into the $110 to $150 range.
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