Oil prices jump after US-Iran ceasefire expires and Trump threatens Oman
Oil prices have risen again after the two-month window to negotiate a peace deal in the US-Israel war on Iran expired on Monday with no
Oil prices have risen again after the two-month window to negotiate a peace deal in the US-Israel war on Iran expired on Monday with no end to the conflict in sight. Iran said on Monday that it would take a more aggressive stance if talks with the US failed, while Donald Trump demanded Tehran “put up the white flag of surrender” in an interview with Fox News. He also threatened to bomb Oman if it “gets in the way” of his effort to end the war, the second time he has directed such a threat at the longtime US strategic partner. “If Oman gets in the way, we’ll bomb the shit out of them,” Trump told Fox News on Monday. Brent crude rose above $90 a barrel for the first time since 30 July, and was trading at $91.63 on Tuesday morning.
“Oil has jumped to start the week as US-Iran relations look increasingly shaky,” said Tim Waterer, the chief market analyst at KCM. “A deal to reopen the strait of Hormuz still does not appear to be in sight, and shipping numbers remain at a trickle.” A cargo ship was attacked while travelling through the strait early on Tuesday, according to the UK Maritime Trade Operations agency, after an Iranian official told Reuters that it would shift to a “fully offensive” military stance. Fox News also reported on Tuesday that Ebrahim Zolfaghari, the Iranian military spokesperson, said vessels attempting to pass through the strait will “find several beautiful holes in their hulls”. Even before that, just six commodity ships travelled through the waterway on Monday according to Kpler, a ship tracking company. That was slightly up compared with the weekend, when five ships transited through Saturday and Sunday combined.
Analysts at Deutsche Bank wrote on Tuesday that the rising oil prices were a sign of investors pricing in “a more extended closure” of the strait. Trump made the threat against Oman as he struggles to draw the conflict to a close almost six months after it began. But the US president also claimed during Monday’s interview that he was “not in a hurry” to reach a deal. skip past newsletter promotion Free newsletter | Every weekday Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email Sign up after newsletter promotion He has repeatedly claimed the war would end “soon”, and talked up the prospect of a lasting peace deal in recent months, without such a breakthrough materialising.
Trump said he would not impose a fresh deadline on Iran, adding: “I have no time schedule. I’m not in a hurry.” Dan Alamariu, the chief geopolitical strategist at the research company Alpine Macro, warned that if there is no end to the fighting in the Middle East, energy prices could see a “double whammy” from that combined with Russia’s ongoing war in Ukraine. He said that “escalation from September through November is likely and could deliver a double shock … even if a bigger two-war convergence remains just a tail risk”. “Energy market risks will persist, and oil and gas prices and volatility would spike with another bout of sustained, intense conflict, especially in the Gulf,” Alamariu wrote.
The BriefWire