However, unlikely, the oil market is buoyed by expectations for a de-escalation of hostilities: File Image/Pixabay

Hope continued to inform oil trading on Tuesday, supported by reports that Iran was considering pausing shipments through the Strait of Hormuz to avoid spoiling the chance of a new round of peace talks – and accordingly, Brent fell 4.6 percent to settle at $94.79 per barrel.

West Texas Intermediate, which in the previous session climbed $2.51 to $99.08 per barrel, tumbled by over 7 percent to settle at $91.28 per barrel.

Rachel Ziemba, a senior fellow at the Center for a New American Security, said, “If Iran does indeed pause shipments, it would be a sign its government too seeks de-escalation and to avoid the resumption of the hot war.

“Pausing shipping would add to the oil market outages temporarily, though global markets would likely focus on the possibility of an agreement, not the short-term outage.”

Peter Tuz, president of Chase Investment Counsel Corp, said markets were looking at "temporary risks which will be overcome in fairly short order, as opposed to being the start of a new ... regime of higher inflation, higher energy prices, higher interest rates; because if that were the new regime, there is very little reason to believe the market would be as strong as it is right now."

It fell upon the International Energy Agency to offer a more sobering perspective of the U.S./Iran war’s impact on oil; in its latest monthly report it stated,  “Oil demand is expected to contract by 80 kb/d this year, as the Iran war upends our global outlook...this is 730 kb/d less than in last month’s Report and a forecast 1.5 mb/d 2Q26 decline would be the sharpest since Covid-19 slashed fuel consumption.”

The IEA added, “Initially, the deepest cuts in oil use have come in the Middle East and Asia Pacific, mainly for naphtha, LPG and jet fuel; however, demand destruction will spread as scarcity and higher prices persist.”

In other oil news on Tuesday, the American Petroleum Institute estimated  that U.S. crude inventories rose 6.1 million barrels in the week ending April 10 compared to expectations for a 1.3 million barrel draw; also gasoline inventories rose by 626,000 barrels after plummeting by 4 million barrels the week prior.

Inventories in the Strategic Petroleum Reserve continue to draw down, to the tune of 4.1 million barrels during the same time frame, in order to alleviate the pressure on prices.