Crude Oil Falls Below $95 as Talks Resurface, But Analysts Warn of Structural Price Support

Oil prices saw another significant decline on Wednesday, trading below the $95 mark. The slump came amid growing expectations that diplomatic talks between the U.S. and Iran could resume. This renewed dialogue has stoked hopes of easing crucial supply constraints currently plaguing Middle Eastern oil flows.

The dip follows a week of intense market volatility. Brent crude futures slipped 52 cents, or 0.55%, settling at $94.27 a barrel at 0054 GMT. This extended the downward trend, continuing a 4.6% drop seen in the previous trading session.

U.S. West Texas Intermediate (WTI) crude followed suit, dropping $1.04, or 1.1%, to $90.24. This movement came after WTI had suffered an even greater loss of 7.9% on the day prior.

Diplomatic Progress Eases Supply Fears​

The primary driver behind the latest price action is the potential for renewed diplomacy. U.S. President Donald Trump stated on Tuesday that talks to resolve the conflict involving the U.S., Israel, and Iran might restart in Pakistan within the next two days.

This comment comes after negotiations stalled over the weekend, which prompted Washington to impose a blockade on Iranian ports. The mere prospect of re-opening dialogue has fueled optimism that a resolution could restore essential crude and fuel supplies.

Despite these signs of potential diplomatic progress, the physical supply conditions on the ground remain severely disrupted. The conflict has effectively choked the Strait of Hormuz, a critical artery for moving crude and refined products from the Gulf to global consumers, especially in Asia and Europe.

Expert Views on Price Floor and Ceiling​

Market commentators are divided, but nearly all predict significant long-term support for crude prices. Macquarie brokerage noted that even if tensions ease, prices are expected to remain supported in the $85 to $90 range.

However, the firm also forecasts a gradual climb toward $110 as normal flow resumes through the Strait of Hormuz. Furthermore, Macquarie advised that if current disruptions extend throughout April, Brent could still climb to $150 per barrel.

Major institutional players echo this bullish structural view. Nuvama Institutional Equities pointed out that the continued closure of the Strait of Hormuz, which processes approximately 20 million barrels per day, could propel crude prices into the $110–$150 per barrel range.

Structural Support and Near-Term Outlook​

Most experts suggest crude may be entering a structurally higher price phase. Ajit Mishra, Senior Vice President at Religare Broking, suggested that any current ceasefire is temporary. He argued that a return to pre-war levels of $70 to $75 could take several months.

For the immediate term, Mishra expects crude to operate within a range of $80 to $85 on the downside and $95 to $100 on the upside. Meanwhile, Kayanat Chainwala of Kotak Securities offered a slightly higher projection, noting that oil could rise to $120 per barrel in the near term and potentially reach $150 if the conflict persists.

Ultimately, analysts concur that as long as tensions persist, the outlook for crude remains volatile with a clear upward bias. Continued disruptions in the Middle East, particularly around the vital Strait of Hormuz, are predicted to keep supply tight. This dynamic is expected to support both Brent and WTI prices, thus maintaining upward pressure and global inflationary pressures.