Brent gains as US-Iran postpone meeting in Switzerland
The front-month ICE Brent contract has gained by $1.73/bbl on the day, to trade at $79.49/bbl at 09.00 GMT.
IMAGE: An oil refining and storage facility. Getty Images
Upward pressure:
Brent’s price has moved higher after talks between US and Iran, to finalise the peace deal, got stalled.
Earlier this week, US President Donald Trump fast-tracked an interim agreement to cease all hostilities in the Middle East by physically signing the deal ahead of a state dinner in Versailles, France.
However, a formal signing ceremony between Washington and Tehran was planned to take place in Switzerland today, the White House had told earlier.
US Vice President JD Vance cancelled plans to travel to Switzerland, raising doubts about the viability of a lasting peace agreement, Reuters reported.
Israel has sidelined itself from the US-Iran deal after being left out of the talks, maintaining its offensive against the Hezbollah militant group in Lebanon – a stance that intensifies concerns regarding the agreement's long-term stability.
“Iran suspends start of nuclear talks over continued Israeli strikes on Lebanon,” VANDA Insights’ founder Vandana Hari remarked.
Downward pressure:
Brent crude’s price has remained below the $80/bbl mark as a partial normalisation of shipping through the Strait of Hormuz begins to alleviate the market's primary concern – potential disruptions to global crude flows.
Crude oil tankers stranded in the region are resuming transit, with around 10 million bbls exiting or moving through the strait, according to two analysts from ING Bank. “Kuwait is already signalling a gradual restart,” the two analysts said.
The current level remains largely below typical flows of around 20 million b/d, but the gap is expected to narrow as production recovers.
“Oil prices are on track for a sharp weekly decline, as shipping flows through the Strait of Hormuz begin to normalise and disruption concerns ease,” two analysts from ING Bank noted.
By Aparupa Mazumder
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