Brent Rises as US-Iran Uncertainty Persists

Brent crude climbed toward $106 per barrel on Tuesday, extending its gains as ongoing uncertainty surrounding US-Iran negotiations outweighed the resumption of oil flows through Saudi Arabia’s East-West pipeline. Iranian officials have reportedly cast doubt on the possibility of reaching an agreement to end hostilities in the Middle East and reopen the Strait of Hormuz before the US midterm elections in November. Recent US-Iran talks in New York produced limited progress, with President Donald Trump rejecting Tehran’s latest proposal to reopen the strategic waterway. However, Trump is reportedly considering sanctions relief for Iran and the unfreezing of funds if meaningful progress is made toward a nuclear agreement. Meanwhile, Saudi Arabia has reportedly restored oil flows to around 3.5 million barrels per day following repairs to a key pipeline that provides an alternative route around Hormuz.

Brent crude trimmed gains to around $105 a barrel after topping $108.5 on Monday amid reports that Saudi Arabia is ramping up flows through its critical East-West pipeline following repairs. Saudi Arabia is reported to have restored flows to around 3.5 million barrels per day. The pipeline was shut down earlier this month after sustaining damage in a drone strike launched from Iraq. Meanwhile, US President Donald Trump is reportedly open to sanctions relief for Iran and the release of frozen funds if concrete progress is made toward a nuclear deal. Earlier, Trump rejected Iran’s conditional offer to reopen the Strait of Hormuz and told aides he expects US strikes on the country to resume after November’s midterm elections. Fading hopes for an imminent diplomatic breakthrough between the US and Iran had driven crude to session highs. Separately, Yemen’s Saudi-led coalition said on Saturday that it had intercepted projectiles launched by Iran-backed Houthi rebels.

Brent crude rose toward $108 a barrel on Monday, recovering from a 2.1% decline in the previous session, as fading hopes for an imminent diplomatic breakthrough between the US and Iran renewed concerns over Middle East supply disruptions. Tehran and Washington remain divided over a potential ceasefire and the reopening of the Strait of Hormuz, with Iran continuing to support a proposal rejected by US President Donald Trump. Nevertheless, Iranian Foreign Minister Abbas Araghchi was expected to meet mediators in New York, while separate discussions between US and Iranian representatives were reportedly planned for Monday or Tuesday. Meanwhile, Saudi Arabia has resumed crude exports through its East-West pipeline after repairs following drone strikes earlier this month. Around 3.5 million barrels a day was flowing through the route, providing an important alternative for Saudi shipments during the conflict.