Oil Eases as Trump Signals Restraint on Iran, but Hormuz Risk Caps Losses
(MENAFN- MENAFNEditorial) Brent and WTI fell on Monday after President Trump said fresh US strikes on Iran “ere “highly u”likely” provided talks to end the conflict make progress. The remarks mark a clear shift in tone from Washington. Current talks cover ’oth Iran’s nuclear programme and the reopening of the Strait of Hormuz, and any real progress could feed into the oil supply outlook.
Diplomacy is now the main driver of the risk premium. A deal that restores normal tanker traffic through Hormuz would remov’ the market’s main supply risk. Until then, continued attacks on shipping keep a floor under prices.
Fundamentals add to the downside. According to estimates, the global market moved into a 1.1m b/d surplus in September, widening to 1.4m b/d in October. Middle Eastern exports recovered, output elsewhere rose and demand weakened. With the market already oversupplied, every barrel returning from the Gulf pushes prices directly lower.
This week’s direction depends on whether talks produce concrete commitments on Hormuz’shipping. The EIA’s Short-Term Energy Outlook on Tuesday will update the supply picture. A sustained recovery in exports would extend the decline, while a breakdown in talks or new attacks at sea would quickly rebuild the geopolitical premium.
Diplomacy is now the main driver of the risk premium. A deal that restores normal tanker traffic through Hormuz would remov’ the market’s main supply risk. Until then, continued attacks on shipping keep a floor under prices.
Fundamentals add to the downside. According to estimates, the global market moved into a 1.1m b/d surplus in September, widening to 1.4m b/d in October. Middle Eastern exports recovered, output elsewhere rose and demand weakened. With the market already oversupplied, every barrel returning from the Gulf pushes prices directly lower.
This week’s direction depends on whether talks produce concrete commitments on Hormuz’shipping. The EIA’s Short-Term Energy Outlook on Tuesday will update the supply picture. A sustained recovery in exports would extend the decline, while a breakdown in talks or new attacks at sea would quickly rebuild the geopolitical premium.
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