Oil prices swing on mixed signals over US-Iran deal prospects
Oil prices have been highly volatile in recent days, swinging between sharp drops and gains as markets interpret conflicting signals from Washington and Tehran over the prospects of a deal to end the US-Israel war on Iran and reopen the critical Strait of Hormuz shipping route.
On Monday, oil prices fell nearly 7% as optimism grew that the United States and Iran were moving closer to a peace deal, according to ABC Australia. Brent crude futures were down $7.24, or almost 7%, at $96.30 a barrel, while US West Texas Intermediate futures were down $6.30, or 6.5%, at $90.88. Trading volumes were light due to the US Memorial Day holiday.
However, the decline was short-lived. By Tuesday, Brent crude oil rose 3% after the US military carried out strikes in Iran, as reported by The Hindu. Global benchmark Brent was up $3.04, or 3.2%, to $99.18 a barrel, after settling 7% lower in the previous session. US West Texas Intermediate was down $4.07, or 4.2%, from Friday's close, at $92.53.
The mixed signals extended to statements from US and Iranian officials. US President Donald Trump said on social media on Sunday that negotiations with Tehran were proceeding in an "orderly and constructive manner," but he had instructed officials "not to rush into a deal," according to Al Jazeera. "Both sides must take their time and get it right. There can be no mistakes!" Trump wrote on Truth Social.
His remarks came after he raised hopes for a breakthrough on Saturday by announcing that a deal had been "largely negotiated," with the terms including the reopening of the Strait of Hormuz, as reported by the BBC. Trump said on social media that he had a "very good call" with the leaders of Saudi Arabia, the United Arab Emirates, Qatar, and others about a "Memorandum of Understanding pertaining to PEACE."
US Secretary of State Marco Rubio said on Tuesday that negotiating a deal with Iran could "take a few days," quashing hopes for an imminent end to the conflict, according to The Hindu.
Coverage comparison
Reports from multiple outlets show differing pictures of the same events. ABC Australia and Al Jazeera both reported significant oil price falls on Monday, but Al Jazeera also noted that Brent crude fell about 5 percent on Sunday, while ABC Australia reported a 7% decline on Monday. The BBC reported that oil prices climbed on Monday morning trade in Asia after Iran fired missiles at Israel, with Brent jumping by 2.6% to $95.50 a barrel. This contrasted with reports of price drops earlier that day.
Al Jazeera's coverage also highlighted that Japan's stock market surged to a record high on hopes of an end to the war, with the Nikkei 225 rising above 65,000 for the first time. The BBC similarly reported that Asian stock markets had risen on hopes of a deal.
France 24's analysis noted that Donald Trump's messaging on bargaining with Iran was enough to push Brent crude oil below $100 a barrel for the first time in two weeks, and that both Washington and Tehran are managing expectations of a final deal or memorandum of understanding.
Key claims
- Oil prices fell nearly 7% on Monday as optimism grew that the United States and Iran were moving closer to a peace deal, with Brent crude futures down $7.24 at $96.30 a barrel and US West Texas Intermediate futures down $6.30 at $90.88, as reported by ABC Australia.
- Brent crude fell about 5 percent on Sunday, and Japan's Nikkei 225 stock index surged more than 3 percent in morning trading to hit an all-time high, as reported by Al Jazeera.
- Oil prices climbed on Monday morning trade in Asia after Iran fired missiles at Israel, with Brent jumping by 2.6% to $95.50 a barrel, as reported by the BBC. US President Donald Trump reportedly told news outlet Axios that he will urge Israel "not to retaliate."
- The United States stock market has been hovering near record highs and oil prices have plunged amid new hope that a ceasefire deal between the US and Iran is close, with US crude falling 5.5 percent to settle at $88.68 and Brent crude decreasing to $92, as reported by Al Jazeera.
- The Guardian reported that the US has accepted it cannot achieve through war what it set out to do in terms of forcing Iran to make concessions over its nuclear programme. Iran will receive its assets in return for restoring the prewar status quo, with the amount and timing of dispersal potentially tied to concessions on the nuclear file.
- Brent crude oil rose 3% on Tuesday after the US military carried out strikes in Iran, and US Secretary of State Marco Rubio said negotiating a deal could take a few days, as reported by The Hindu.