Key Highlights
- Brent crude hovers around $95 per barrel while West Texas Intermediate trades between $88 and $91
- Washington and Tehran are exploring a two-week truce extension before the current April 21 deadline
- Disruptions at the Strait of Hormuz continue to threaten 3.8 million barrels per day of oil transit
- China reported 5% GDP growth year-over-year in Q1, providing modest support for oil demand forecasts
- International Energy Agency and OPEC have both cautioned about weakening oil demand amid ongoing conflict
Crude oil markets have found relative stability this week as the United States and Iran deliberate whether to extend their current ceasefire by an additional two weeks, providing negotiators more runway to secure a lasting peace agreement that has remained elusive.
Brent crude continues to trade in the vicinity of $95 per barrel. West Texas Intermediate fluctuates within the $88 to $91 range. Both oil benchmarks remain approximately one-third above pre-conflict levels from late February, although significantly beneath the $120 spike witnessed during the initial phase of hostilities.
The temporary truce between Washington and Tehran faces expiration on April 21. Diplomatic meetings conducted in Pakistan over the previous weekend failed to produce a breakthrough. Negotiating teams are currently attempting to organize technical-level discussions addressing the most contentious matters, including restoring access through the Strait of Hormuz and managing Iran’s nuclear enrichment activities.
Commander Ali Abdollahi of Iran’s joint military headquarters issued a statement declaring that continued US blockade actions would result in Iran preventing all commercial traffic through the Persian Gulf, Sea of Oman, and Red Sea corridors.
Washington has maintained a naval blockade designed to restrict Iranian maritime movements. Tehran has responded by effectively closing the strait to most international shipping. The Strait of Hormuz serves as a critical chokepoint linking Persian Gulf oil producers to international markets.
Vivek Dhar, an analyst with Commonwealth Bank of Australia, noted that the blockade jeopardizes approximately 3.8 million barrels daily of crude oil and refined products that transited through this strategic waterway during the previous month.
Physical Market Diverges from Futures Pricing
Kaes Van’t Hof, chief executive of Diamondback Energy, suggested that oil futures markets fail to accurately capture conditions in the physical crude market. According to Van’t Hof, futures contracts increasingly reflect expectations of conflict de-escalation rather than actual circumstances on the ground.
Warren Patterson, commodities strategist at ING Groep, shared similar concerns, noting that any ceasefire agreement would likely prove fragile given the substantial gap between US and Iranian negotiating positions, creating significant upward pressure on oil prices moving forward.
Both the International Energy Agency and OPEC issued warnings this week that the conflict continues to suppress global petroleum demand.
Chinese Economic Data Provides Limited Support
China’s economy expanded 5% on a year-over-year basis during the first quarter of 2026, reaching the top end of Beijing’s annual growth objective. The performance exceeded analyst expectations and provided some positive momentum for oil demand prospects in the world’s top crude importing nation.
Nevertheless, economic growth decelerated as the quarter concluded. China sources a substantial portion of its crude imports from Iran, introducing additional uncertainty into demand projections.
In related developments, Thailand is pursuing emergency procurement agreements for oil and fertilizer supplies via Oman. Australia faces reduced domestic fuel production following a fire incident at Viva Energy’s Geelong refinery facility. Indian officials have cautioned that economic disruptions from the conflict could rival those experienced during the pandemic.
US President Donald Trump indicated this week that resolution of the conflict appears imminent and that additional diplomatic discussions could commence within the coming days.
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