Brent crude oil price slipped to $99.2 today, May 23, after reports that the United States and Iran were nearing a deal to extend the ceasefire by 60 days. It was trading at $100.1 on Hyperliquid, while the West Texas Intermediate fell to $96.
Brent Crude Oil Price Slips As US-Iran Tensions Ease
“The deal seems to be going in the right direction. It’s with the Americans now for review. Iranians are likely ready to give more on nuclear energy but won’t do it while the war is ongoing — this deal helps bridge the gap.”
A deal between the two countries would come at a time when Trump is preparing an attack. Odds of the strike rose after he said that he would not be attending Donald Trump Jr.’s wedding. He also said that he would remain in Washington meeting his top security officials.
Some influential people in Trump’s circle, including Benjamin Netanyahu and Mark Levin, have been urging him to attack. Their argument is that Iran cannot be trusted to abide by any agreement the two countries sign. Also, abandoning the war would leave Iran being more powerful.
Iran Warned Of A Powerful Response If Attacked
Iran, on the other hand, warned that it would unleash its most powerful weapons if attacked. In a statement on Friday, officials warned that their retaliation will not be limited to the Middle East.
A possible response would be to launch attacks towards the Red Sea, where 12% of all oil passes through. Saudi Arabia has used its pipeline to ship over 7 million barrels of oil per day through the Red Sea.
Shutting traffic in that narrow water body would lead to a supply squeeze at a time when demand remains steady and inventory drawdown is accelerating at a record pace.
Trump is trapped in a situation without an easy way out. Restarting the war will push oil prices higher at a time when the average gasoline price is trading at $4.56 as the driving season starts. His approval ratings have also plunged to a record low, and the situation may get worse.
On the other hand, reaching a deal would lead to criticism as it will likely be weaker than the Joint Comprehensive Plan of Action, commonly known as the JCPOA, which he exited in 2018.
Since official oil markets are closed on weekends, investors are turning to Hyperliquid, a prominent player in the perpetual futures space that enables oil trading around the clock. According to data on its website, WTI and Brent recorded volumes of $383 million and $283 million, respectively, in the past 24 hours.
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