Brent gains as hope of US-Iran ceasefire dwindles

The front-month ICE Brent contract has gained by $1.15/bbl on the day, to trade at $92.21/bbl at 09.00 GMT.

IMAGE: An oil pumpjack. Getty Images

Upward pressure:

Brent’s price has moved higher in the wake of fading ceasefire hopes between Washington and Tehran.

In the latest round of fire exchange, the US Central Command (CENTCOM) has targeted Iranian military surveillance, communication systems and air defense sites.

“Oil prices have continued to rally… amid additional US strikes in Iran,” two analysts from ING Bank said.

Iran’s navy has responded to the US strikes by declaring a complete closure of the Strait of Hormuz to all vessel traffic.

These strikes have effectively erased the oil market’s optimism established by April’s fragile ceasefire.

The latest development “once again suggests a deal is still some way off and that energy flows from the Persian Gulf will remain heavily constrained,” ING Bank’s analysts said.

Downward pressure:

While there are no significant downward pressures on Brent’s price today, market participants will be focused on any suggestions of progress in US-Iran negotiations.

Earlier this week, Israeli Prime Minister Benjamin Netanyahu said the Israel Defense Forces (IDF) will refrain from attacking Iranian sites “for now”.

By Aparupa Mazumder

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