Brent rangebound amid uncertainty over US-Iran peace deal
The front-month ICE Brent contract has declined by $0.89/bbl on the day, to trade at $93.26/bbl at 09.00 GMT.
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Upward pressure:
Brent’s price has felt upward pressure following reports that Iran is stepping back from the ongoing negotiations with Washington and moving ahead with a complete blockade of the Strait of Hormuz.
The breakdown in negotiations comes shortly after Israel’s military moved further inside Lebanon, raising concerns of a broader Middle East conflict.
Meanwhile, Oman’s Maritime Security Centre (MSC) issued an advisory for all vessels to exercise extreme caution after sighting a suspected floating mine in the region.
Crude oil prices can surge to $180/bbl by August if the US-Iran conflict intensifies and the Strait of Hormuz remains closed, Jorge León, head of geopolitical analysis at Rystad Energy, said in an interview with CNBC.
“Oil price direction continues to be dictated by Iran-related headlines amid considerable uncertainty over how negotiations between the US and Iran are progressing,” two analysts from ING Bank noted.
Downward pressure:
Despite the absence of significant bearish drivers, Brent’s price has declined today.
Market participants will be watching closely for any further signs of progress in US-Iran negotiations.
“President Trump says that negotiations are continuing,” ING Bank’s analysts noted.
Negotiators from both sides agreed on a draft memorandum of understanding last week to extend the ceasefire and lift restrictions on shipping through the Strait of Hormuz.
By Aparupa Mazumder
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