Brent Falls on Iran Deal Optimism

Brent crude futures slipped toward $98 per barrel on Friday, trimming gains from the previous session after US President Donald Trump voiced optimism about a possible agreement to end the conflict with Iran. He said Tehran had accepted terms that include abandoning ambitions for a nuclear weapon, providing “free oil,” and reopening the Strait of Hormuz, though Iranian authorities have yet to confirm the claims. Trump also announced a 10-day ceasefire between Israel and Lebanon, which was confirmed by Israeli Prime Minister Benjamin Netanyahu. Meanwhile, the Strait of Hormuz remains effectively closed due to a dual blockade by the US and Iran, keeping markets on edge over further disruptions to global energy flows. Meanwhile, IMF Executive Director Fatih Birol warned that restoring a meaningful portion of disrupted oil and gas output could take up to two years.

Brent crude futures rose by more 4% to above $99 per barrel on Thursday as doubts resurfaced over ongoing US–Iran negotiations. Reuters reported that the peace talks now point to diminished prospects for a broad agreement and opening of the Strait of Hormuz and are now focused on securing a temporary memorandum to avoid renewed conflict. Meanwhile, benchmark prices showed little immediate reaction after President Trump said Israeli and Lebanese leaders had agreed to begin a 10-day ceasefire starting Thursday. Further supporting prices, signs of tightening supply are emerging. After seven consecutive weeks of builds, US crude inventories fell by 9.13 million barrels last week, far exceeding analysts’ expectations for a 154,000-barrel increase, according to the US Energy Information Administration.

Brent crude futures rose above $97 per barrel on Thursday after facing pressure earlier in the week, as investors assessed the likelihood of an extension of the ceasefire between the US and Iran while weighing the possibility for a broader agreement that could end the conflict and reopen the Strait of Hormuz. Reports indicated that Washington and Tehran are mulling an extension to their two-week ceasefire to allow more time to negotiate a peace deal. Meanwhile, the Strait of Hormuz remains effectively closed, with a US naval blockade on Iranian ports still in place, keeping markets on edge over further supply disruptions. Iran also warned it could retaliate against an extended US blockade by suspending shipments across the Persian Gulf, the Sea of Oman, and the Red Sea. Markets are now turning their attention to a likely second round of US-Iran talks, expected to center on reopening the strait and Iran’s nuclear enrichment activities.