Oil prices hit one-month high as US-Iran talks remain uncertain
Photo: prices fell after Trump's statement about the continuation of dialogue between the US and Iran (Getty Images)
The price of oil jumped to a record level, breaking a monthly record, influenced by uncertainty in negotiations between the US and Iran, as well as the risk of a prolonged reduction in energy flows from the Persian Gulf, reports Bloomberg.
West Texas Intermediate crude traded near $92 per barrel after rising more than 5% in the previous session, while Brent crude fell slightly below $95.
Prices rose on Monday following reports that Tehran is suspending negotiations with Washington in protest against Israeli attacks in Lebanon, and then fell after US President Donald Trump said that the dialogue is ongoing.
He also added that a memorandum of understanding with Iran on reopening the Strait of Hormuz could be signed within the next week, according to a phone conversation he had with ABC News. Trump said the US still needs to score a few more points before the deal.
Bloomberg notes that the lack of clarity on the potential extension of the current ceasefire and the future of energy flows through the Strait of Hormuz has weighed on oil prices, which fell last month amid optimism about a potential deal.
A report by the semi-official Iranian news agency Tasnim also stated that Tehran and its regional intermediaries have included on their agenda the complete closure of the Strait of Hormuz, as well as the Bab el-Mandeb Strait – a crucial alternative for oil exports.
Rebecca Babin, senior energy trader at CIBC Private Wealth Group, said that further signs that the parties were no longer actively negotiating would also remove some of the security guarantees that the market had relied on to determine the best outcome. She added that they had seen many ups and downs throughout the conflict and that nothing had been definitively determined.
The report also states that Iran is threatening to close the Bab el-Mandeb Strait.
Bloomberg emphasises that the confusion has been compounded by the fact that Trump and Israeli Prime Minister Benjamin Netanyahu assessed the conversation regarding hostilities in Lebanon differently.
As is known, Iran announced the suspension of negotiations with the US due to the escalation of hostilities in Lebanon.
As a result, a ceasefire agreement was reached between Tel Aviv and Hezbollah, approved with US mediation. It is to be extended from Beirut to all Lebanese territories, with further negotiations scheduled for Tuesday and Wednesday.
