Ammon News - Oil prices fell on Tuesday, reversing gains in the previous session, on ‌expectations peace talks between the U.S. and Iran will take place this week and allow more supply to flow from the key Middle East producing region.

Brent crude futures declined 54 cents, or 0.6%, at $94.94 a barrel at 0300 GMT. U.S. West Texas Intermediate (WTI) for May fell $1.11, or 1.2%, to $88.50. The May contract expires on Tuesday and the more-active June ​contract was down 76 cents, or 0.9%, at $86.66.

Both benchmarks surged on Monday, with Brent up 5.6% and WTI up 6.9%, after Iran again ​shut the Strait of Hormuz, closing the key oil transport artery, and the U.S. seized an ⁠Iranian cargo ship as part of its blockade of the country's ports.

Iran is weighing participation in peace talks in Pakistan, a senior Iranian official told ​Reuters on Monday, following Islamabad's efforts to end the U.S. blockade.

The blockade has posed a major hurdle to Tehran rejoining peace efforts, with the ‌current ⁠two-week ceasefire set to expire this week.

Underscoring the uncertainty around the talks, the Iranian official stressed that no decision has been ​made to attend, as Iranian ​Foreign Minister Abbas Araqchi said "continued ⁠violations of the ceasefire" by the U.S. is a hindrance to further negotiations.

Separately, Iran's top negotiator and Speaker of Parliament Mohammad Baqer Qalibaf reiterated that Tehran would not negotiate under threats.

Shipping activity through ​the Strait of Hormuz, a corridor for about one-fifth of the world's oil supply, remained limited on ​Monday.
If disruptions to ⁠the strait persist for another month, total losses could rise to about 1.3 billion barrels, with prices likely near $110 a barrel in the second quarter of 2026, Citi said.

Kuwait declared force majeure on oil shipments due to the strait's blockade, Bloomberg News reported.

The higher prices caused ⁠by the ​closure of the strait have cut oil demand by about 3% so far, ​analysts at Societe Generale said in a client note.

The risk is "skewed toward larger losses the longer normalisation is delayed," it said, adding it expects "full normalisation" to ​supply only by late 2026.

Reuters