Oil Prices Remain Weak After US Grants Iranian Oil Waiver
World oil prices continued to weaken in Tuesday's trading, after the market saw progress in peace talks to end the Iran war. Brent crude traded below US$78 per barrel, after falling 3.3% on Monday, its biggest drop in nearly a week. Meanwhile, West Texas Intermediate, or WTI, hovered near US$74 per barrel.
Pressure on oil prices emerged after the United States issued a 60-day temporary license permitting some sales of Iranian oil and petroleum products. This policy signaled that talks between Washington and Tehran were beginning to show positive results. For Iran, the permit is a vital economic boost, opening up opportunities for energy sales to international markets amid the negotiations.
However, the market remains uncertain about the smooth running of the peace process. Both US and Iranian officials have cited progress in the first round of talks, but differing claims remain. US Vice President JD Vance said Iran had agreed to allow nuclear inspectors into the country, a claim Tehran has denied. This situation indicates that the road to a final agreement remains long and fraught with tensions.
In addition to the nuclear issue, the market is also closely monitoring the ceasefire in Lebanon between Israel and Hezbollah and the security of the Strait of Hormuz. This route is crucial for global oil and gas shipments. Previously, the near-closure of the Strait of Hormuz disrupted energy supplies and shook the market. Now, signs of recovery are emerging after Qatar brought more empty LNG tankers to the Persian Gulf via Hormuz. Some vessels have also reportedly passed without concealing their location, indicating that shipping flows are gradually recovering.
However, analysts warn that the market could be too quick to price in additional supply before it actually occurs. Rebecca Babin of CIBC Private Wealth believes that oil prices often fluctuate excessively, both when the market anticipates a supply shortage and when it anticipates a surplus. Going forward, the direction of oil prices will still be determined by the continuation of US-Iran negotiations, discussions on Iran's nuclear program, Lebanon's stability, and the safe opening of the Strait of Hormuz. If the peace process continues, oil could potentially remain under pressure. However, if negotiations stall again, prices could rebound. (asd)*
Source: Newsmaker.id
