Oil Rises After US-Iran Talks Postponed
Brent oil prices rose on Friday (June 19) after US-Iran talks in Switzerland were abruptly canceled, adding to uncertainty over efforts to turn an interim deal into a permanent peace deal. Brent rose 0.9% to close at $80.57 per barrel, while WTI rose 1.23% to $77.54 per barrel in Friday afternoon trading.
The Swiss Foreign Ministry stated that the US-Iran meeting scheduled for Bürgenstock did not proceed as planned. The White House also stated that Vice President JD Vance would no longer travel to Switzerland due to ongoing logistical issues in the negotiations.
Prices briefly weakened after Israel and Iran-backed Hezbollah agreed to a ceasefire. However, that pressure was short-lived as the market remained skeptical about whether the interim US-Iran deal could evolve into a stronger agreement capable of ensuring a full restoration of energy flows.
Vice President JD Vance previously said tankers carrying more than 12 million barrels of oil had passed through the Strait of Hormuz overnight. He also noted that Iran had not fired on ships in the waterway for two consecutive nights, which was seen as an early sign that Tehran was upholding its commitments.
However, the physical recovery is not yet fully convincing. Several major shipping companies have not yet resumed transit through Hormuz, while insurance costs remain high. This indicates that the market remains cautious about the pace of normalization of this key energy route.
OPEC Secretary-General Haitham Al Ghais said the organization does not expect oil demand to peak anytime soon. He also rejected the International Energy Agency's projections predicting a potential future oversupply, emphasizing that OPEC is more focused on actual fundamental data.
PVM Oil Associates analyst Tamas Varga believes that the conditional opening of the Strait of Hormuz, the lifting of force majeure by Kuwait, and the end of the US naval blockade have reassured investors that the major disruption that had pushed oil prices above $120 is over. However, he warned that the recent sell-off may not be sustainable in the short term, despite the positive step of the 60-day ceasefire.
Tiago Lacerda of Axi predicts oil could move in the range of $75 to $82 per barrel in the near term, with Brent having fallen about 36% from its peak during the conflict. The market's next focus will be on whether the physical opening of Hormuz actually proceeds, whether major shipping lanes reopen, and whether insurance costs begin to decline.
Source: Newsmaker.id
