Oil plummets as Trump indicates Iran-US peace deal signing

Brent crude’s price has plunged below the $90/bbl mark after US President Donald Trump said the time and place to sign a US-Iran peace deal will be “announced shortly.”

IMAGE: Getty Images

It has been a volatile week for the global oil market, defined by a rapid-fire sequence of geopolitical shocks.

After oil prices opened the week on a strong foot, following a resumption of direct conflict between US and Iranian forces, compounded by Trump’s warnings of a heavy military response, the market saw an equally swift reversal yesterday.

“I have… cancelled the scheduled strikes and bombings against Iran this evening,” Trump announced on social media platform Truth Social.

That price momentum evaporated as the US President pivoted, halting hostilities and announcing that details regarding a potential peace deal would be released soon.

“Discussions and final points [of negotiation] have been, in both concept and great detail, approved by all parties involved,” he wrote.

However, market analysts remain sceptical, noting that previous cycles of optimism regarding a potential deal were swiftly negated by renewed hostilities.

“We would be cautious about assuming that the extension of the ceasefire is a done deal,” two analysts from ING Bank noted. “Even if it is, it could be fragile. And clearly, if nuclear talks do not progress, it could very easily fall apart,” they added.

Strait of Hormuz remains a flashpoint

The ongoing hostilities in the Middle East have taken a major toll on the global oil and shipping industries, market analysts note.

Yesterday, the US Central Command (CENTCOM) disabled the Palau-flagged oil tanker M/T Settebello, in the Gulf of Oman for failing to comply with the ongoing US blockade.

The attack allegedly resulted in the deaths of three Indian seafarers and was heavily condemned by the International Maritime Organization (IMO).

Another incident was reported moments later after a vessel caught fire in its engine room, about 21 nautical miles (nm) northeast to Sohar, Oman, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.

Trump said that the US naval blockade of the Strait of Hormuz will be in place until the deal is finalised.

By Aparupa Mazumder

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