Oil pulls back on diplomatic hopes

April 21, 2026 (MLN): Oil prices slipped on Tuesday, giving back some of the sharp gains seen in the previous session, as attention was turned  to the possibility of renewed U.S.–Iran negotiations that could ease supply constraints.

Currently, Brent crude futures are down by $0.68, or 0.71%, to $94.79 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures are down by $0.93 or 1.06%, to $86.49 per barrel by [9:27 am] PST.

Both major benchmarks had rallied strongly jumping 6% after escalating tensions in the Middle East disrupted key flows. Iran’s renewed closure of the Strait of Hormuz, a critical global shipping route, alongside a U.S. seizure of an Iranian cargo vessel, fueled fears of supply shortages.

However, sentiment shifted as investors weighed expectations that diplomatic talks scheduled for later this week could lead to an extension of the current ceasefire or even a broader agreement. Such an outcome could pave the way for increased oil exports from the region.

Despite this optimism, uncertainty remains elevated. Iranian parliamentary speaker Mohammad Bagher Ghalibaf signaled a hardline stance, stating that Tehran would not engage in negotiations under pressure and had prepared additional “options on the battlefield” if tensions escalate, on his X account, CNBC reported.

The ongoing U.S. blockade of Iranian ports continues to complicate diplomatic progress, particularly as the existing two-week ceasefire approaches its expiration.

Meanwhile, shipping activity through the Strait of Hormuz responsible for roughly one-fifth of global oil supply remains subdued, emphasizing the fragile state of energy markets amid geopolitical risks.

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