Oil prices surge to $108 amid stalled US-Iran peace talks
What's the story
Oil prices have surged by nearly 2% today, amid stalled US-Iran peace talks and continued restrictions on shipments through the crucial Strait of Hormuz. The developments have heightened fears of a global supply squeeze. Brent crude futures rose $2.16 or 2.05% to $107.49 a barrel, their highest since April 7. Meanwhile, West Texas Intermediate crude increased by $1.77 or 1.88% to $96.17 per barrel.
Diplomatic setback
Trump cancels Pakistan visit by envoys
The weekend saw a setback in hopes of renewed diplomatic progress, as US President Donald Trump called off a planned Islamabad visit by his envoys Steve Witkoff and Jared Kushner. This happened even after Iranian Foreign Minister Abbas Araqchi had reached Pakistan. Iran continues to insist that vessels must seek its approval before passing through the Strait of Hormuz, while Trump claims the US has "total control" over the waterway.
Military stance
Goldman Sachs revises 4th-quarter oil price forecasts
The US Navy has kept a blockade on Iranian ports and vessels. The situation has led Goldman Sachs to revise its fourth-quarter oil price forecasts, predicting $90 per barrel for Brent crude and $83 for WTI due to reduced output. "The economic risks are larger than our crude base case alone suggests because of the net upside risks to oil prices, unusually high refined product prices, products shortages risks, and the unprecedented scale of the shock," said Goldman Sachs analysts.
Market forecasts
Current ceasefire phase may be preparing for renewed conflict
A note from Haitong Futures, cited by Reuters, suggests that the current ceasefire phase may be preparing for renewed conflict. It warned if US-Iran talks do not yield meaningful progress by the end of April and hostilities resume, oil prices could hit new highs this year. Macquarie predicts crude prices could remain supported in the near term ($85-$90 range) before gradually rising toward $110 as supply conditions improve.
Price projections
Macquarie sees potential for significant price increases
Macquarie also warned that extended disruptions through April could push Brent as high as $150 per barrel. Nuvama Institutional Equities said a prolonged closure of the Strait of Hormuz, which handles some 20 million barrels/day, could send crude prices into the $110-$150 range. The projections highlight how geopolitical tensions and supply constraints are likely to keep oil prices elevated in the coming months.