Oil Price Today (April 21): Crude oil dips below $95 despite Iran war ceasefire ending this week. Here’s why

Despite lingering tensions, market participants are now focusing on the possibility that talks this week could extend the current ceasefire or even lead to a broader agreement. However, risks of renewed conflict and supply disruptions remain.

Crude oil price on April 21

Brent crude futures fell 95 cents, or 1%, to $94.53 at 0003 GMT. U.S. West Texas Intermediate crude for May dropped $1.54, or 1.72%, to $88.07. The May contract expires on Tuesday, while the more actively traded June contract declined $1.09, or 1.3%, to $86.37. A senior Iranian official indicated that Tehran is considering joining peace talks in Pakistan, following diplomatic efforts by Islamabad to ease the U.S. blockade, a news report by Reuters stated.

Live Events

On Saturday, Iran tightened its grip over the strait in response to the U.S. blockade, reportedly firing at several vessels and declaring the route closed. The blockade has emerged as a key obstacle to Tehran’s return to peace negotiations, with the current two-week ceasefire due to end later this week.

Where are prices headed?

Market movements remain highly reactive to developments, with oil prices swinging on shifting signals from both sides rather than any clear improvement in supply conditions. The intermittent movement of vessels through the strait highlights the deep uncertainty surrounding the world’s most critical energy chokepoint. Even if tensions ease, a full recovery in oil flows is expected to take several months, experts warn.Macquarie noted that even if tensions ease, oil prices are likely to stay supported in the $85 to $90 range, with a gradual climb towards $110 as flows through the strait normalize. It also warned that if disruptions persist through April, Brent could spike to as much as $150 per barrel.

Analysts generally believe the market may be entering a phase of structurally higher prices. With the ceasefire seen as temporary, a return to pre-conflict levels of $70 to $75 could take time. In the near term, prices are expected to move within a band of $80 to $85 on the downside and $95 to $100 on the upside.

Nuvama Institutional Equities added that an extended closure of the strait, which handles roughly 20 million barrels per day, could drive crude prices into the $110 to $150 range.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)