Oil Rises Significantly as Market Awaits US Response to Iran Proposal
Oil prices rose to a three-week high above US$110 per barrel in London, as market participants await the United States' stance on Tehran's proposal to end the war and reopen the Strait of Hormuz. Brent briefly traded above US$111, bringing its weekly gain to nearly 6%, while WTI hovered above US$100.
The market's focus remains on supply risks, as the closure of the Strait of Hormuz has restricted the flow of crude oil, natural gas, and petroleum products, pushing energy prices higher and fueling inflation concerns. Although a ceasefire has been relatively holding since early April, the blockade involving Iran and the US has reduced daily traffic through the strait to near zero.
US President Donald Trump held a meeting to discuss the Iranian proposal but emphasized the existence of "red lines" in any deal, including preventing Tehran from acquiring nuclear weapons. The Wall Street Journal reported that the US national security team is skeptical of the proposal, although negotiations are said to be ongoing, with responses and counter-proposals likely to emerge in the coming days.
According to Rabobank, the market is beginning to assess the likelihood of a quick solution to end the blockade, leading to a risk premium being reintroduced to oil prices. Within the framework of fundamental transmission, prolonged supply disruptions are tightening energy availability and increasing inflationary pressures, which in turn could impact policy expectations and risk sentiment across assets.
From Iran's perspective, local media reported that Foreign Minister Abbas Araghchi will convey to Pakistan—which is mediating peace talks—that the conflict can end if the US lifts its naval blockade, agrees to a new legal framework for traffic in the strait, and provides assurances that there will be no further military action. The market is now monitoring Washington's response and operational developments in the Strait of Hormuz as key determinants of energy price volatility in the near term. (asd)*
Source: Newsmaker.id
