Bold opening: Oil prices bounce back, but the path to a Iran deal remains murky and hotly debated.
Oil markets recovered some ground after Tuesday’s dips, as traders re-evaluated a potential Iran–United States agreement. But as the day wore on, sentiment shifted again, and skepticism resurfaced across the trading floor.
Brent crude traded around $67.59 per barrel, while West Texas Intermediate hovered near $62.49 per barrel. Both benchmarks had slid about 2% on Tuesday, reaching two-week lows, before the rebound. part of the rebound came as Iran conducted naval drills that partially shut the Strait of Hormuz, a move seen by some as a signal to Washington that Tehran could impede a major oil chokepoint if tensions escalate further.
The notion of closing the Strait of Hormuz is a recurring theme whenever Iran–U.S. or Iran–Israel tensions flare. Yet Iran has shown restraint so far, likely to avoid a quick, large-scale conflict given the U.S. stronger military presence in the Persian Gulf. A prolonged closure would be unsustainable and could trigger a swift response from the United States and possibly disrupt global oil flows even more severely.
In Geneva, Iran’s foreign minister Abbas Araghchi indicated that negotiators had agreed on the broad guiding principles of a deal, but he cautioned that reaching a final agreement would take time.
A Reuters briefing quoted Indian analyst Sugandha Sachdeva of SS WealthStreet, who suggested crude prices look set for a technical rebound, yet a finalized agreement remained distant and markets remained cautious about sustaining diplomatic momentum.
Separately, Eurasia Group assessed a 65% probability of a U.S. military strike on Iran by April.
By Irina Slav for OilPrice.com
Further reading from OilPrice.com:
- Hungary seeks Croatian help as Russian oil flows via Ukraine halt
- Iran closes part of critical oil chokepoint for navy drills
- Iran talks, Ukraine blockade, and VLCC crunch driving price movement
