Oil Prices Rebound on Iran Deal Uncertainty, Markets Stay on Edge
By Aboki Forex —
Oil prices climbed from a six-week low on Monday, as doubts resurfaced over a potential peace deal to end the war in Iran. Brent crude rose to around $93 a barrel, recovering from its lowest close since mid-April on Friday. West Texas Intermediate also gained, trading near $90 a barrel.
The United States and Iran exchanged messages over the weekend, seeking changes to a draft agreement that could extend the current ceasefire and reopen the Strait of Hormuz. But it remains unclear if the two sides are making real progress. The standoff follows a period of optimism that had pushed crude prices down for the first time this year, as traders bet on resumed energy flows through the vital waterway.
Brent crude is still up more than 25% since the war began in late February. The near-total closure of the Strait of Hormuz has caused unprecedented disruption in global oil markets.
“Neither Iran nor the US are capitulating or compromising on their red lines for an agreement,” said Hamzeh Al Gaaod, an independent economist covering the Middle East and North Africa. He added that oil prices will likely swing between optimism and caution as new headlines emerge, calling it a “statement cycle.”
President Donald Trump urged calm on the Iran deal, posting on Truth Social that “it will all work out well.” Trump last spoke on the matter Friday at a White House Situation Room meeting, where he said he expected to announce a 60-day extension of the current truce with Iran. Earlier that day, he reiterated demands that Iran suspend its nuclear program and fully restore the Strait of Hormuz as a free international waterway.
Over the weekend, the semi-official Tasnim news agency, which is close to the Iranian Revolutionary Guard Corps, reported that both sides continue to propose amendments. It warned that both the US and Iran might ultimately reject the changes, causing the deal to collapse.
“Even after the recent selloff, oil is still trading at a pretty elevated level,” said Haris Khurshid, chief investment officer at Chicago-based Karobaar Capital LP. “This suggests the market isn’t pricing peace yet, it’s just pricing a lower probability of the worst case scenario.”