Brent surges as hopes of US-Iran peace dwindles

The front-month ICE Brent contract has gained by $5.36/bbl on the day, to trade at $89.92/bbl at 09.00 GMT.

IMAGE: Oil storage facility. Getty Images

Upward pressure:

Brent crude’s price has gained by more than $5/bbl over the last session as the little remaining hope of a swift de-escalation between Washington and Tehran fades.

Iran’s announcement of six sweeping preconditions to reopen the Strait of Hormuz, followed by US President Donald Trump’s response has put upward pressure on oil this week.

Iran would consider reopening the critical waterway after its demands are met, it said earlier. In response, Trump demanded that Iran pay “compensation” to Washington for war-related damages.

“The oil market remains very headline-driven, which leaves prices whipsawing,” two analysts from ING Bank noted.

“The latest bout of optimism is quickly fading, with demands for war reparations from Iran, which President Trump rejected,” ING Bank’s analysts said.

Downward pressure:

While there are no major downward pressures acting on Brent’s price today, market analysts are keeping an eye out for any developments in the Iran-Oman agreement to reopen the Strait of Hormuz.

Last week, Tehran said it was getting closer to finalising a deal with Oman, regarding jointly managing the Strait of Hormuz.

By Aparupa Mazumder

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