Trump Won't Rush, Oil Remains Down
Oil prices weakened sharply after the US and Iran were reported to be nearing a deal, despite President Donald Trump's insistence that Washington's blockade of the Strait of Hormuz would remain in place until the agreement was finalized. The market responded by reducing the risk premium that had built up over the past few weeks due to the worst-case scenario of supply disruptions.
Global benchmark Brent oil fell as much as 6.2% to US$97.10 per barrel, while WTI hovered around US$91. At 11:44 a.m. in Singapore, Brent for July settlement fell 5.7% to US$97.69, and WTI fell 5.9% to US$90.89.
On the negotiating side, senior US officials said a final agreement could still take several days. Trump stated he would not be "rushed" because the deal "hasn't even been fully negotiated." US Secretary of State Marco Rubio also said diplomacy was still a "work in progress," and the market shouldn't jump to conclusions from every daily signal.
Uncertainty remains as core differences remain unresolved, including the issue of Iran's nuclear program and sanctions. Tasnim news agency warned that the draft deal could still fail due to US claims that certain clauses, including the demand that the freeze on Iranian assets be lifted, are still being implemented. Some analysts believe oil is already pricing in short-term "relief," but lacks the basis for a truly lasting resolution.
On the physical side, the potential full reopening of Hormuz would be beneficial for Asian energy importers, but ship traffic remains far below normal, despite signs of movement. Iran claims dozens of ships have passed through after receiving permission from the IRGC, while other reports indicate several tankers and LNG vessels have begun to leave in recent days. The market is also wary of additional risks from tit-for-tat attacks by Russia and Ukraine on energy infrastructure, as well as thinner liquidity due to the holidays for most market participants in the US and UK. (asd)
Source: Newsmaker.id
