Oil Prices Decline Amid Signs of Potential Resumption of Peace Talks
Yesterday (23), the most traded Brent contract closed higher, reaching USD 105.07/bbl (+3.10%). WTI futures followed a similar trend, ending the day at USD 95.85/bbl (+3.11%).
Oil prices climbed for the fourth consecutive session, driven primarily by concerns over a potential escalation in tensions among the U.S., Israel, and Iran. Additionally, the seizure of more vessels in the Persian Gulf and the resignation of Iran’s chief negotiator have heightened expectations of prolonged restrictions on energy product flows from the Middle East, putting upward pressure on oil prices.
This morning (24), the Brent contract for June 2026 delivery is trading lower by 0.7%, quoted at USD 103.8/bbl as of 9:00 AM. Reports suggesting that Iran’s Foreign Minister may travel to Islamabad this Friday to resume peace talks with the United States are contributing to bearish price pressures.
Pakistan Confirms Possible Resumption of Peace Talks
This morning, Pakistani government sources confirmed the return of Iran’s Foreign Minister, Abbas Aracqui, to Islamabad by the end of the day, renewing optimism about a potential resumption of peace negotiations between Washington and Tehran. So far, there has been no confirmation regarding the U.S. delegation’s travel to Pakistan.
Why This Matters: After a week marked by heightened fears of another escalation in Middle Eastern conflicts, confirmation of potential diplomatic talks between the U.S. and Iran has reignited expectations for the possible lifting of blockades imposed by Iranian and U.S. forces in the Strait of Hormuz, putting downward pressure on market prices.
- It is worth noting that while last week the market was pricing in greater optimism regarding diplomatic talks between Washington and Tehran, this week has seen prices absorb risks tied to a renewed escalation in conflict. This includes threats from the Trump administration against the Iranian regime and the possibility of resumed Israeli attacks in Lebanon, which have significantly pushed prices up, with the most traded Brent contract rising 16% between Monday (20) and Thursday (23).
What to Expect: Despite the potential resumption of talks between Washington and Tehran in Islamabad, the market remains cautious about signs of reconciliation between the two nations, with this bearish pressure potentially being short-lived depending on the progress of the discussions.
- As time passes and the Strait of Hormuz blockade persists, financial markets are expected to increasingly factor in the fragile physical market conditions, with several regions worldwide—particularly Europe and Asia—experiencing fuel shortages.
- Even with a potential peace resolution and gradual reopening of the Strait of Hormuz, prices are expected to remain elevated compared to pre-war levels. This is due to the lengthy timeline required for the global logistics network to normalize and for oil production and refining in Gulf countries to resume, which is anticipated to take medium to long-term horizons, leaving the global balance impacted by this scenario.
StoneX Releases Third Revision of Diesel B Demand Estimates
Yesterday, StoneX Market Intelligence published its third revision of diesel B demand, diesel A, and biodiesel estimates in Brazil for 2026. While maintaining projections for a 1.9% growth, totaling 70.8 million m³, the study highlighted significant changes in expectations for Brazil’s domestic diesel balance this year.
Key Highlights: Domestic diesel A production gained momentum in the first quarter, growing by 4.5%, reflecting refiners’ efforts to increase supply amid uncertainties in the international market.
- As a result, StoneX adjusted its diesel A production estimates upward for 2026, totaling 48.1 million m³ (+1.6%). The Brazilian market is now expected to operate with higher production in the short term, while medium-term supply is likely to decelerate due to maintenance needs at refineries operating near maximum capacity.
- Consequently, diesel A imports are projected to decline in 2026, with a base scenario (B15) estimate of 17.2 million m³, marking a 0.6% decrease compared to 2025. In the B16 scenario beginning in July, the drop is expected to be even steeper, around 2.7%, totaling 16.9 million m³.
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