Oil Falls As Trump Hints At Chance Of US-Iran Deal
Oil prices fell slightly on Tuesday after US President Donald Trump signaled optimism about the prospects for a US-Iran peace deal, a day after prices surged on signs that negotiations had stalled. Brent for August delivery traded near $94 per barrel after rising 4.2% in the previous session, while WTI hovered around $91.
Price movements reflected a market that quickly changes based on headlines. On Monday, prices were boosted by reports that Tehran had halted talks with Washington in protest of Israel's attack on Lebanon. However, the rally subsided after Trump said negotiations were continuing.
In a phone call with ABC News, Trump said a memorandum of understanding (MoU) with Iran to reopen the Strait of Hormuz could be reached in about a week. However, he emphasized that there were still "some points" to be resolved before a deal is reached, so the next direction remains highly dependent on the details of the negotiations.
Uncertainty over the extension of the ceasefire and the future of shipping flows through Hormuz continues to maintain volatility. Iran's semi-official Tasnim news agency reported that Tehran and its regional proxies have put the complete closure of the Strait of Hormuz and the Bab el-Mandeb Strait on their agenda—two highly sensitive chokepoints for the global energy supply chain. Giovanni Staunovo, a commodities analyst at UBS, believes Trump's indication of easing tensions is weighing on oil prices, although oil flows through Hormuz are said to remain limited.
Inconsistent signals also come from differing statements from Trump and Israeli Prime Minister Benjamin Netanyahu regarding a phone call regarding the fighting in Lebanon. The Lebanese government has stated that the US-brokered ceasefire between Tel Aviv and Hezbollah needs to be expanded, with further negotiations taking place on Tuesday and Wednesday.
At 8:52 a.m. in New York, August Brent fell 0.9% to $94.14 per barrel. July WTI fell 0.7% to $91.55 per barrel. Looking ahead, the market will be monitoring developments on the Hormuz MoU, the status of the ceasefire talks, and any indication of whether the risk of a shipping lane closure is actually increasing or simply a negotiating pressure.
5 Key Points
-Oil fell slightly after rallying, as Trump hinted at the possibility of a US-Iran deal.
-Brent August crude approached $94 after rising 4.2% in the previous session; WTI around $91.
-Trump said a memorandum of understanding (MoU) on reopening the Strait of Hormuz could be reached in about a week, but issues remain.
-Uncertainty over the ceasefire and risks to the Hormuz and Bab el-Mandeb routes maintained volatility.
-Brent fell 0.9% to $94.14; WTI fell 0.7% to $91.55 in the New York session. (gn)
Source: Newsmaker.id
