Hormuz Secure, Oil Under Pressure
Oil prices weakened again on Tuesday (June 23rd), as market participants monitored signs of progress in peace talks to end the Iran war. Brent crude fell to around US$77 per barrel, while West Texas Intermediate (WTI) hovered around US$73 per barrel. Pressure also came from weakening global stock markets, which made investors more cautious about risky assets.
The main sentiment weighing on oil prices stemmed from the United States' decision to issue temporary 60-day licenses permitting some sales of Iranian oil and petroleum products. This policy came after talks between Washington and Tehran in Switzerland were described as productive. For Iran, the permits provide important economic space, while for the global market, they open up opportunities for additional oil supplies to the international market.
However, the peace process remains unclear. US and Iranian officials have both cited progress in the first round of talks, but some discrepancies have emerged. US Vice President JD Vance said Iran had agreed to accept nuclear inspectors, a claim Tehran denied. This situation indicates that negotiations remain lengthy, particularly regarding nuclear issues, sanctions relief, and regional security mechanisms.
The market is also still monitoring developments in the Strait of Hormuz, a vital route for global oil and gas shipments. Previously, the near-closure of this route had depressed energy supplies and shaken global markets. Now, signs of recovery are emerging as supply from the Persian Gulf increases, with several producing countries, such as Kuwait and the United Arab Emirates, seeking routes to continue sending energy out of the region. Iran has also reportedly shipped more than 30 million barrels of oil in the past week.
However, analysts warn that the market could be pricing in additional supply too soon before it actually occurs. If peace negotiations continue and the Strait of Hormuz is secured again, oil prices could potentially remain depressed. However, if talks stall again, the nuclear issue escalates, or the Strait of Hormuz is disrupted again, oil could rebound. For now, oil's direction remains fragile as the market juggles between hopes for peace and unresolved geopolitical risks. (arl)
Source: Newsmaker.id
