Oil Prices Fall as US Allies Ready to Discuss Hormuz Recovery
Oil prices fell on Friday (April 17) as the market assessed the increased likelihood of de-escalation, following signs of possible further US-Iran talks over the weekend and a 10-day ceasefire between Lebanon and Israel. Brent fell 3.11% to US$96.30/barrel at 09:42 GMT, while WTI slumped 4.23% to US$90.68/barrel.
Despite the daily falls, weekly movements remained split: Brent was on track to gain 1.2% for the week, while WTI was headed for a 6% drop compared to Friday's close. Prices have also returned below US$100/barrel, but remain above US$90 after a strong rally in March that reached around 50%.
Market participants believe a geopolitical discount is forming as Washington and Tehran appear to be lowering their ambitions for a deal: two Iranian sources told Reuters that negotiators are now pursuing an interim memorandum to prevent a recurrence of conflict, rather than a comprehensive peace package. President Donald Trump also touched on a key point of contention in the war, saying Tehran offered a commitment to not possess nuclear weapons for more than 20 years.
But the path to a deal remains fragile. Israel's campaign in Lebanon remains a major obstacle to Trump's peace efforts. Meanwhile, France and the UK will chair a meeting of some 40 countries on Friday to signal that US allies are ready to play a role in restoring traffic through the Strait of Hormuz when conditions permit.
For energy markets, the underlying narrative remains the same: the more credible the chances of talks and the stability of the ceasefire, the faster the risk premium can be removed from oil prices. Conversely, any diplomatic setbacks or disruptions in Hormuz could potentially bring back volatility. Markets are now monitoring the outcome of the weekend talks, the resilience of the Lebanon-Israel ceasefire, and developments in international coordination regarding restoring traffic through Hormuz. (Arl)*
Source: Newsmaker.id
