Oil Rises as US-Iran Trade Offensive, While Negotiations Remain Open
Oil Rises as US-Iran Trade Offensive, While Negotiations Remain Open
Oil prices rose on Wednesday (June 3) as the market weighed uncertainty over the direction of US-Iran talks, amid renewed attacks by both sides on Tuesday. The July West Texas Intermediate (WTI) contract rose more than 2.1% to US$95.76, while the August Brent contract rose nearly 2% to US$97.86 per barrel.
Currently, Brent is at US$98.38, up 2.68%, while WTI is at US$98.42, up 3.08%. This strengthening comes amid renewed geopolitical tensions in the Middle East. US Central Command (CENTCOM) stated on Tuesday that it had intercepted several Iranian ballistic missiles and drones and launched defensive strikes following an "attempt" by Iran, which the market viewed as a sign of escalating regional risks.
At the same time, US President Donald Trump and Secretary of State Marco Rubio stated that Washington remained engaged in talks with Tehran regarding a potential deal to end the conflict. This statement counterbalanced the risk narrative after Iranian media reported that communications between the two sides had stalled, fueling speculation that diplomatic progress had deteriorated.
Rubio also told the Senate Foreign Relations Committee that during the discussions, there was "a prospect" that Iran could negotiate some aspects of its nuclear program. This contradicted a report by the Fars news agency that Tehran and Washington had not exchanged messages for several days, and a Tasnim report that Iranian negotiators would halt indirect communications and consider completely closing the Strait of Hormuz, a vital global oil shipping route.
Trump later denied the report that the two countries had stopped communicating, calling it untrue in a Truth Social post on Tuesday afternoon. However, uncertainty about whether the talks actually resulted in a de-escalation or stalled continues to maintain the risk premium on oil. On the fundamental side, Fitch Group analysts assess that the US-Iran war has triggered widespread disruptions in the region's oil and gas sector, ranging from declining exports and halted production to repeated attacks on infrastructure that have left billions of dollars in damage and delayed recovery. Fitch considers Qatar, Bahrain, and Iraq to be among the most heavily exposed, making developments in energy infrastructure security and the status of the Strait of Hormuz key variables for the market to monitor in the coming sessions. (asd)*
Source: Newsmaker.id
