Oil slides on ceasefire hopes

Oil fell sharply on April 17 after traders bet a 10-day Israel-Lebanon ceasefire and possible new U.S.-Iran talks could ease the supply threat hanging over the Middle East. (cnbc.com) U.S. crude for May delivery dropped 11.45% to settle at $83.85 a barrel, and Brent for June delivery lost 9.07% to $90.38 after Iran said commercial vessels could pass through the Strait of Hormuz during the ceasefire. (business-standard.com) Earlier in the day, Reuters reported Brent at $96.30 and West Texas Intermediate at $90.68 by 09:42 GMT, with prices already falling on expectations that Washington and Tehran could meet over the weekend. (offshore-technology.com) Oil had risen on fears that fighting could choke off the Strait of Hormuz, the narrow waterway that carried about 20 million barrels a day in 2024, equal to roughly one-fifth of global petroleum liquids consumption. (eia.gov) That route matters because Gulf producers ship crude and fuel through Hormuz, and traders add a “risk premium” to prices when they think tankers could be delayed, attacked, or blocked. (eia.gov) The latest drop followed a violent stretch in both directions. On April 8, Brent fell 13.3% to $94.76 and West Texas Intermediate slid 15.2% to $95.79 after President Donald Trump announced a two-week U.S.-Iran ceasefire tied to reopening Hormuz. (cnbc.com) That truce did not settle the wider conflict. Reuters reported on April 17 that a U.S. naval blockade of Iranian ports remained in force, even as Trump said the United States and Iran were “very close” to a deal and negotiators were working on a three-page memorandum of understanding. (energynow.com) Axios reported on April 17 that one proposal under discussion would release $20 billion in frozen Iranian funds in exchange for Iran giving up its stockpile of enriched uranium, though significant gaps remained in the talks. (axios.com) The Israel-Lebanon ceasefire that began on April 16 also fed the move lower. Reuters reported that Trump said Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun would be invited to the White House for talks, while the U.S. State Department said both sides aimed to create conditions for a lasting peace. (cnbc.com) Analysts said the selloff reflected traders stripping out the extra price they had added for war risk, not a sudden surge in oil supply. By Friday’s close, crude was back to trading on the assumption that ships can keep moving — at least for now. (business-standard.com)