Oil price fluctuates ahead of Trump’s Iran deal deadline
Oil price fluctuates ahead of Trump’s Iran deal deadline
Global oil prices showed volatility as the deadline set by US President Donald Trump for Iran to reopen the Strait of Hormuz shipping route neared. Benchmark Brent crude reached above $111 per barrel in early trade, then hovered near the $110 level before stabilizing around $107. The uncertainty surrounding the deal has kept markets on edge, with traders closely monitoring developments.
Trump escalated tensions by warning that Iran could face a “nighttime strike” if it failed to reach an agreement by 20:00 Washington time on Tuesday. This threat comes amid disruptions to Middle Eastern oil and gas shipments, as Tehran targets vessels using the strait in response to US and Israeli airstrikes since late February. The conflict has significantly slowed the flow of energy resources through the critical waterway.
“A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will,”
Trump wrote on social media, reflecting his firm stance. US stock markets opened lower on Monday, with mixed performance across indices. The Nasdaq rose slightly, the S&P 500 remained flat, and the Dow dipped by 0.2%.
Analysts suggest that the initial surge in oil prices on Tuesday signals concerns over the difficulty of securing a deal. Ye Lin of Rystad Energy noted that Iran’s hardline position might prolong the conflict, making it harder for the US to achieve a resolution. Traders are also questioning whether Trump’s threats are genuine or a strategic distraction.
“Even if a conflict resolution is reached, economic benefits may take time to materialize,”
explained Tineke Frikkee, a senior fund manager at W1M. She highlighted delays in restoring full operations for commodities like liquefied natural gas, which require months to reboot infrastructure.
Asian nations, heavily dependent on Gulf energy, have sought temporary agreements with Iran to ensure safe passage for their ships. However, Frikkee emphasized ongoing challenges, noting that while some vessels navigate the strait, increased insurance costs and competition among countries complicate the situation. The highest bidder may now determine the cost of safe passage.
Global concerns about inflation have grown as the conflict disrupts supply chains. Jamie Dimon, CEO of JPMorgan, warned that rising interest rates could follow, driven by the strain on energy markets. Ahead of the deadline, the UK convened military allies from over 30 countries to plan security measures for the Strait of Hormuz, with additional discussions scheduled.
Trump has also called on nations to deploy warships to the region, aiming to safeguard commercial traffic. Despite these efforts, the conflict continues to cast a shadow over global energy stability, with around a fifth of the world’s oil and gas moving through the narrow waterway.
