MW Oil futures fall further below $100 on hopes of peace deal
By Nora Redmond
IEA now expects demand destruction this year
The International Energy Agency said it predicts oil demand will decline by 1.5 million barrels per day in the second quarter.
Oil futures on Tuesday fell further below $100 as hopes rise that the U.S. and Iran may soon reach a peace deal.
West Texas Intermediate (CL.1) (CLK26), the U.S. benchmark, declined by almost 3% to $96.49, while Brent crude (BRN00) (BRNM26), the international benchmark, fell by 0.8% to $98.56 a barrel.
It comes following the release of a Reuters report early on Tuesday that U.S. and Iranian delegations could return to Pakistan's Islamabad as soon as this week after failing to agree during discussions over the weekend. Oil prices rose above $100 on Monday as traders feared the failed negotiations could mean a prolonged conflict in the Middle East.
The U.S. on Monday imposed a blockade in the Strait of Hormuz.
"So as far as markets are concerned, the expectation remains that this is still likely to be a temporary conflict, with the oil futures curve heavily downward-sloping," analysts at Deutsche Bank led by Henry Allen wrote in a note on Tuesday.
High prices are helping to solve the issue of high prices by reducing demand. The International Energy Agency found in its latest oil market report that demand is expected to contract by 80,000 barrels per day this year - compared to growth of 640,000 forecast in last month's report. For the second quarter, the agency said it's predicting a demand decline of 1.5 million barrels a day, making it the sharpest since the Covid-19 pandemic, when fuel consumption dropped as people stayed at home.
The IEA's estimates are based on an assumption that regular deliveries of oil and gas from the Middle East, although not pre-war levels, resume to international markets by the middle of the year. The IEA notes this may be "too optimistic" given uncertainty over the possibility of de-escalation.
"We also present an alternative case where risks to energy production and trade in the Middle East remain high due to a prolonged conflict," it said. "In this case, energy markets and economies around the world need to brace for significant disruptions in the months to come."
-Nora Redmond
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April 14, 2026 05:55 ET (09:55 GMT)
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