Crude oil prices retreated amid reports that the United States and Iran are exploring a phased agreement that could potentially reopen the Strait of Hormuz, easing supply disruption concerns across global energy markets.
Talks soften energy risk
Brent crude fell 0.5 percent to $106.10 a barrel at 08:10 Singapore time, according to Bloomberg data, while West Texas Intermediate slipped 0.7 percent to trade at $93.91 a barrel. The waterway normally carries approximately one-fifth of global oil and natural gas supplies daily during peacetime. Brent gained 70 percent year-to-date.
Discussions between Washington and Tehran are reportedly taking place on the sidelines of the United Nations General Assembly, as their conflict approaches the end of its seventh month after beginning at the end of February with strikes launched alongside Israel. Donald Trump previously widened pressure campaigns in the region.
Diplomatic stakes and price ranges
Haris Khurshid, Chief Investment Officer at Karobaar Capital LP, said Brent will likely stay around $100-110 per barrel unless there is a material change. A credible phased deal could push prices back below $100 per barrel fairly quickly, while another failure in export or logistics chains could open the door to $120 per barrel again, Khurshid noted. Disruptions could lift prices.
Regional security friction remains active around vital infrastructure corridors after Saudi Arabia intercepted missiles fired at the Red Sea port of Yanbu and the city of Taif by Iran-backed Houthi militants. French President Emmanuel Macron stated that France will deploy troops to help secure Saudi energy facilities.
Related: Iran offers Strait of Hormuz deal to lift US oil curbs · Oil drops as Iran signals terms to open Hormuz
