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\n\tBut Iran warns the war could resume and “transcend every border and domain”: File Image\/Pixabay<\/p>\n
\u201c<\/p>\n \n\tYou’ve got to take \u200call these pronouncements with a grain of salt<\/p>\n John Kilduff, founding partner, Again Capital<\/p>\n
\n\tTwo key benchmarks on Wednesday dropped<\/a>\u00a0by 5 percent after U.S. president Donald Trump told media that Washington is in the final stages of peace negotiations with Iran.<\/p>\n
\n\tThis followed the brash billionaire calling off renewed military strikes against the Islamic republic earlier this week.<\/p>\n
\n\tBrent plummeted 5.6 percent to close at $105.02 per barrel, and West Texas Intermediate dropped by the same percentage to close at $98.26 per barrel.<\/p>\n
\n\tAccording to Wood Mackenzie, oil prices would plummet severely if the U.S. and Iran reached a peace deal that opened the Strait of Hormuz by June; however, it was difficult for many pundits to imagine such a deal taking place, considering Trump\u2019s remarks on Wednesday were accompanied by the commander of Iran\u2019s Islamic Revolutionary Guard Corps vowing<\/a>\u00a0that the war will \u201cerupt into flames and transcend every border and domain\u201d if any new strike should be initiated by the U.S.<\/p>\n
\n\tU.S. secretary of war Pete Hegseth responded that his country was \u201clocked and loaded\u201d in the event Iran agreed to anything less than halting its nuclear ambitions.<\/p>\n
\n\tJohn Kilduff, founding partner at Again Capital, said<\/a>, “You’ve got to take \u200call these pronouncements with a grain of salt \u2060these days, but the market was also quick to reward it and price in the hope of a resolution.”<\/p>\n
\n\tCitibank told clients that \u201cIt appears increasingly likely, in our view, that the Iranian regime will disrupt Strait of Hormuz flows for some time\u201d and added that it expects Brent to trade up to $120 per barrel in the near term.<\/p>\n
\n\tFor his part, Sultan Al Jaber, CEO of United Arab Emirates\u2019 ADNOC, estimated<\/a>\u00a0that if the Strait were to open without incident, it would take at least four months to recover about 80 percent of -pre-war flows.<\/p>\n
\n\tMeanwhile, the Energy Information Administration reported that elevated demand caused U.S. stockpiles to fall by 7.9 million barrels to 445 million barrels in the week ended May \u200c15, compared with expectations for a 2.9 million barrel draw.<\/p>\n