Oil prices advanced on Wednesday as peace negotiations between the United States and Iran reached an impasse, with both sides leveraging the blockade of the critical Strait of Hormuz to gain an advantage. Amid conflicting reports regarding the resumption of talks, Brent crude futures settled above $101 per barrel, reaching their highest level in two weeks. Washington and Tehran remain deadlocked on several key issues, including nuclear concerns and Israel's incursion into Lebanon. The United Kingdom Maritime Trade Operations, which liaises with the shipping industry, reported that Iranian gunboats fired upon a cargo ship and a container vessel in the Strait of Hormuz on Wednesday. Transit through the strait remains nearly stalled; under normal circumstances, it facilitates about one-fifth of global crude oil shipments. U.S. President Donald Trump indefinitely extended the ceasefire with Iran but maintained a maritime blockade on vessels entering and leaving Iranian ports to sustain pressure on the Iranian government, a development also viewed as supportive for oil prices. Traders also closely monitored key inventory data released by the U.S. Energy Information Administration on Wednesday. The data indicated declines in stocks across all major refined fuel categories. Global markets have been relying on U.S. supply to offset disruptions in the Middle East. The EIA stated that rising export demand drove total exports of petroleum and fuel products to a record high. "Our baseline assumptions are shifting, now anticipating a more gradual normalization of Persian Gulf shipping flows by mid-May, rather than the previously expected improvement before the end of April," analysts at Société Générale noted. This change alone is prompting the bank to consider raising its year-end Brent crude price forecast from $79 to $85 per barrel. "Even so, this adjusted level may still underestimate the difficulty and time required for a return to normalcy, particularly given the scale of disruptions and constraints related to shipping, insurance, port damage, and wreckage clearance." June WTI crude rose 3.7%, settling at $92.96 per barrel. June Brent crude increased by 3.5%, closing at $101.91 per barrel.
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