Brent dips after Trump points to progress in Iran talks
The front-month ICE Brent contract has declined by $2.64/bbl on the day, to trade at $112.60/bbl at 09.00 GMT.
IMAGE: An oil pumpjack. Getty Images
Upward pressure:
Brent crude’s price has continued to trade above $110/bbl after the US warned of further escalation in the Middle East war.
US President Donald Trump has threatened to "blow up" Iran’s oil wells and power plants, as well as target Kharg Island and its desalination plants, if ongoing negotiations to reopen the Strait of Hormuz yield no outcome.
The threats come “despite [Trump] repeating that the US was in serious discussions with what he called a new regime in Iran to end military operations,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
Kharg Island, which is located about 20 miles off Iran’s coast, holds “most of” Iran’s oil export infrastructure, according to Hynes. Targeting the region would reduce a big chunk of Iran’s oil supply.
Downward pressure:
Weighing on Brent’s price, a report by the Wall Street Journal said Trump has indicated a willingness to end the conflict with Iran, even if the Strait of Hormuz remains largely closed.
In a post on Truth Social yesterday, Trump said “great progress has been made” in efforts to resolve the conflict with Iran, reiterating that a potential deal to end the war remains within reach.
“Oil edged lower Tuesday morning after the Wall Street Journal reported that US President Donald Trump told aides he would be willing to end the military campaign in Iran,” two analysts from ING Bank noted.
By Aparupa Mazumder
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