Hormuz Deadline Nears, Oil Prices Held
Oil prices held steady around US$110/barrel ahead of Tuesday's 8:00 PM ET deadline set by US President Donald Trump for Iran to reopen the Strait of Hormuz or face the threat of destruction of key infrastructure. Brent pared early gains and moved nearly flat in a volatile session, while WTI also pared its gains.
Trump said talks with Iran were "going well," but also emphasized the consequences if a deal is not reached. He said the US military could destroy "every bridge" in Iran and render power plants "burnt" and unusable—steps he called a violation of the Geneva Conventions. Iran warned it would retaliate by escalating attacks on energy infrastructure in the Persian Gulf, potentially exacerbating global fuel shortages and increasing the impact on the world economy.
Short-term supply concerns were also reflected in the derivatives market. The WTI prompt spread—the difference between the two nearest contracts—at one point approached US$15.50/barrel, approaching a record premium, amid expectations of tighter US supplies as foreign buyers sought American crude.
At 10:01 a.m. London time, June Brent was steady at US$109.45/barrel, while May WTI was trading at US$112.73/barrel.
Source: Newsmaker.id
