All eyes are now focused on attempts to get the peace talks back on track: File Image/Pixabay
As anticipated by many hawks, Iran’s refusal to agree to a crucial component of peace talk negotiations with the U.S. caused chaos in oil trading on Thursday, while the International Energy Agency warned that the oil market was barreling towards as “red zone” with the continued blockage of the Strait of Hormuz.
As of 18:30 GMT and after prices rose over 3 percent earlier in the session, Brent fell 31 cents to $104.71 and West Texas Intermediate rose 16 cents to $98.42 per barrel.
The initial price rise occurred after media reported that Iran’s supreme leader Ayatollah Mojtaba Khamenei ordered the country’s enriched uranium to remain in the Islamic republic, which was viewed as a complication of peace talks because of U.S. president Donald Trump’s repeated demand that Iran’s nuclear program be dismantled.
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We’ve been in this situation multiple times before, which ultimately led to disappointment
ING
The development came a day after Iran announced a new ‘Persian Gulf Strait Authority,’ which would oversee a “controlled maritime zone” in the Strait – something Washington andmany world leaders have condemned as unacceptable.
Pakistan’s army chief, Asim Munir, was reportedly en route to Tehran to help get the peace talks back on track, as secretary of state Marco Rubio told media, “The president’s preference is to do a good deal; that’s his preference; it’s always been his preference…If we can get a good deal done, that would be great.”
But former Trump envoy Morgan Ortagus warned that Iran has long used drawn-out negotiations “to stall, to draw negotiations, to buy time…I would encourage the president not to fall into the trap that the Iranians like to do … which is to drag things out.”
ING analysts forecast in a note on Thursday that Brent would average $104 per barrel in the current quarter and said, “We’ve been in this situation multiple times before, which ultimately led to disappointment.”
UPS on Thursday raised its oil price forecasts by $10 per barrel, projecting Brent crude at $105 per barrel and WTI crude at $97 in September.
Meanwhile, the IEA’s executive director, Fatih Birol, warned that summer demand combined with rapidly falling inventories could push global oil markets into a “red zone in July-August if we don’t see some improvements.”
Birol considered the disruption of flows thanks to the Strait blockage more severe than the oil shocks of 1973, 1979, and even the 2022 energy crisis following Russia’s invasion of Ukraine.
Ship & Bunker News Team
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