Brent gains as China dragged into US-Iran conflict
The front-month ICE Brent contract has gained by $1.73/bbl on the day, to trade at $87.63/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
Brent’s price has felt some upward pressure amid worsening ties between the US and Iran.
Washington's sweeping economic sanctions and Tehran’s territorial chokehold on the Strait of Hormuz has left the global oil market hostage to violent, unpredictable price swings.
The US announced nearly 60 Iran-related sanctions and threatened of secondary sanctions on the Islamic Republic’s international allies, like China, earlier this week.
Beijing dismissed Washington’s economic campaign against Iran, pulling directly into the US-Iran crossfire.
Downward pressure:
Brent’s price gains were capped by some positive news coming out of the latest Iran-Oman meeting.
Both countries’ foreign ministers held constructive talks to establish a temporary navigational corridor through the Strait of Hormuz – jointly controlled by Tehran and Muscat.
“Iran and Oman appear closer to an agreement on shipping routes through the Strait of Hormuz,” two analysts from ING Bank noted.
Market analysts have interpreted the news as a potential step toward restoring some commercial navigation through the waterway that once carried one-fifth of global seaborne oil flows.
“We would likely need to see the US lift its blockade on Iranian ports and ease sanctions on Iran before we see any move towards normalisation,” ING Bank’s analysts said.
By Aparupa Mazumder
Please get in touch with comments or additional info to news@engine.online
