Brent declines as optimism over US-Iran peace talks builds

The front-month ICE Brent contract has declined by $3.40/bbl on the day, to trade at $96.27/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

US military activity continues around the Persian Gulf, fueling supply disruption concerns and putting some upward pressure on Brent crude’s price.

Earlier this week, the US Navy struck missile launch sites in southern Iran, as well as boats allegedly attempting to lay mines in the Strait of Hormuz, the US Central Command (CENTCOM) reported.

Shortly after the airstrikes, Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed it had shot down US drones attempting to enter Iranian airspace, Al Jazeera reported.

“The renewed hostilities came despite the US touting progress toward a peace deal,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent crude’s price has declined as market participants shifted focus from Middle East hostilities threats to optimism over a potential US-Iran peace deal.

“Prices are under pressure from improved sentiment around a potential US‑Iran deal,” two analysts from ING Bank wrote.

Earlier this week, Iran’s parliamentary speaker Mohammad Bagher Ghalibaf and foreign minister Abbas Araghchi traveled to Doha, Qatar, to push negotiations toward a final stage.

Market participants will remain focused on any development in the Middle East conflict until the Strait of Hormuz is completely open to vessel traffic.

By Aparupa Mazumder

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