Oil gains as US-Iran talks stall, Hormuz shipping still disrupted

By Ahmad Ghaddar

LONDON, April 23 (Reuters) – Oil prices extended gains on Thursday, rising more than $1 on stalled peace talks between Iran and the United States and continued restrictions on trade through the Strait of Hormuz. 

Brent crude futures rose $1.47, or 1.4%, to $103.38 a barrel by 0931 GMT after settling above $100 for the first time in more than two weeks on Wednesday. West Texas Intermediate futures were up $1.40, or 1.5%, at $94.36. 

Both benchmarks closed more than $3 higher on Wednesday after larger than expected draws on U.S. stocks of gasoline and distillates, plus the lack of progress on Iran peace talks. 

“The market may now be on the verge of a shift from ‘a deal is imminent’ to ‘this may take much longer’. If the expectation of an early May reopening breaks … then prices will likely reprice higher, both in crude and products,” said SEB analyst Bjarne Schieldrop.

While U.S. President Donald Trump extended a ceasefire between the countries after a request by Pakistani mediators, Iran and the U.S. are still restricting transit of ships through the strait that carried about 20% of daily global oil supplies until the war began on February 28. 

Iran seized two ships in the waterway on Wednesday, tightening its grip on the strategic chokepoint. Trump has also maintained a U.S. Navy blockade of Iran’s trade by sea while Iranian ​parliament speaker and ​top negotiator Mohammad Baqer Qalibaf has said that a full ceasefire only made sense if the blockade is lifted. 

The U.S. military has intercepted at least three Iranian-flagged tankers in Asian waters and is redirecting them away from positions near India, Malaysia and Sri Lanka, shipping and security sources said on Wednesday. 

Trump has not set an end date for the extended ceasefire, White House press secretary Karoline Leavitt told reporters. 

US EXPORTS SET RECORD HIGH

On energy trade, total exports of crude oil and petroleum products from the United States climbed by 137,000 barrels per day to a record 12.88 million bpd as Asian and European countries bought supplies after disruptions from the Iran war. 

U.S. crude stocks rose while gasoline and distillate inventories fell, the Energy Information Administration said on Wednesday. [EIA/S]

Crude inventories rose by 1.9 million barrels, compared with expectations for a draw of 1.2 million barrels in a Reuters poll of analysts.

U.S. gasoline stocks fell by 4.6 million barrels against analyst expectations of 1.5 million barrels. Distillate stockpiles dropped by 3.4 million barrels versus expectations of 2.5 million barrels. 

(Reporting by Ahmad GhaddarEditing by David Goodman)