Iran war: Oil surpasses $100/bbl mark as peace talks stalls

Brent crude’s price has bounced back above $100/bbl threshold as hopes of a diplomatic breakthrough hit a roadblock at the UN General Assembly yesterday.

IMAGE: Getty Images

Oil prices have moved higher after high-stakes diplomatic talks at the United Nations General Assembly (UNGA) summit did not go according to the larger market consensus, with the Strait of Hormuz issue remaining a key point of disagreement.

US President Donald Trump threatened Iran with “annihilation” during his speech at the UNGA summit.

“Do I annihilate the Islamic Republic and do it quickly, never giving them a chance to kill and destroy people and countries again?” Reuters cited Trump as saying.

The sharp change in Trump’s rhetoric came one day after he said peace talks were being “very productive.”

Iranian President Masoud Pezeshkian retaliated to Trump’s remarks by stating that Tehran was open to peace talks but added that it will never “bend the knee.” 

“The remarks made by the US president yesterday ... are a sign of a bullying mentality,” Pezeshkian said in his speech at the UNGA summit.

Tehran has outlined a seven-point prerequisite for reopening the Strait of Hormuz, demanding that the US lift its naval blockade on Iranian ports, ease all economic sanctions, and release frozen Iranian assets.

Washington has stopped short of dismissing the demands, though it has given no indication of its willingness to meet them either.

With a swift end to the Middle East war still unlikely, oil prices continue to find strong support, market analysts said.

“Markets will now watch whether those diplomatic signals translate into actual de-escalation and a more durable reopening of Hormuz,” Price Futures Group’s senior market analyst Phil Flynn noted.

Vessel attacks in the Strait of Hormuz persist

The United Kingdom Maritime Trade Operations (UKMTO) agency has reported another incident within the Strait of Hormuz yesterday.

The cargo vessel was hit by an unknown projectile, the UKMTO reported. “The vessel is on fire and adrift. All crew have been evacuated with two casualties reported,” the agency said.

As of yesterday, only 11 vessels attempted to transit the strait – nine inbound, two outbound – market intelligence provider Windward reported, noting that vessel traffic remains well below the pre-war average of 140 daily transits.

So far, the US Central Command (CENTCOM) has redirected 115 commercial vessels, disabled more than three, and boarded two to prevent ships from entering or departing Iranian ports, it said.

By Aparupa Mazumder

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