US and Iran Trade Contradictory Statements; Oil Prices Surge Again
Oil prices rebounded during Tuesday's trading session after a sharp decline in the previous session. Brent crude rose 2.7% to US$86.05 per barrel, while West Texas Intermediate (WTI) gained 2.3% to US$82.22 per barrel.
The rise followed conflicting statements from the United States and Iran regarding talks on reopening the Strait of Hormuz. These discrepancies dampened market optimism regarding a near-term diplomatic solution.
US President Donald Trump stated that talks with Iran were underway, describing the situation as a final opportunity for Tehran to reach an agreement. Trump also called for the Strait of Hormuz to be fully reopened as soon as possible.
However, Iran denied engaging in direct negotiations with Washington. Tehran stated it was only discussing shipping routes with Oman for vessels traversing the region.
The Strait of Hormuz is a vital artery for approximately one-fifth of global oil and liquefied natural gas (LNG) trade. Uncertainty regarding the security of this route has reignited concerns over potential supply disruptions.
Newsmaker Analysis: Iran's denial has reintroduced a geopolitical risk premium into oil prices. In the absence of a concrete agreement, Brent is likely to hold above US$85, while WTI could test the US$83 level. However, a full reopening of the Strait of Hormuz could potentially drive prices down rapidly.
Source: Newsmaker.id