Oil Falls for a Third Day as Trump Guides Neutral Ships Out of Hormuz
Oil prices fell after US President Donald Trump said the US would begin guiding neutral ships out of the Strait of Hormuz, signaling progress in talks with Iran to end the war, now in its 10th week. Brent fell below $108 per barrel for the third straight day, while WTI held around $101.
Trump said the plan, which began Monday, is aimed at helping people, companies, and countries that have done “absolutely nothing wrong.” He also said US representatives were having “very positive” discussions with Tehran that could lead to something “very positive,” without further details. Iran, via Iranian TV, said on Sunday that it was reviewing Washington’s response to the latest 14-point plan.
The price movements reflect the partial unwinding of risk premiums as the tone shifts to de-escalation, although underlying tensions remain. As Haris Khurshid of Karobaar Capital noted, the market reacts to rhetorical signals pointing to de-escalation, but that “doesn’t eliminate the underlying tensions.”
The conflict has disrupted energy markets due to the dual blockade of Hormuz: Tehran preventing ships from leaving the Persian Gulf and the US intercepting vessels heading to or from Iranian ports. Trump has also raised the possibility of using force if this “humanitarian” process is disrupted, while the Wall Street Journal reported this latest plan does not involve US Navy warships, citing an official.
On the policy front, Treasury Secretary Scott Bessent said well shut-ins could begin “within the next week” as Iranian storage is full, as the US blockade aims to cut off Iran’s economic lifeline. Furthermore, OPEC+ agreed to a symbolic increase in June production quotas to signal “business as usual” following the United Arab Emirates’ withdrawal, adding another layer of market supply dynamics as it assesses whether the Hormuz move and diplomatic signals are enough to further reduce geopolitical premiums. (gn)
Source: Newsmaker.id
