Oil Edges Up Amid Mixed Messages on ‘Talks’ as Iran Denies Negotiations, Trump Threatens ‘Hell’

Oil prices rose and equities were mixed Thursday as investors tracked developments in the Middle East war after Iranian officials were said to have replied to US demands to end a conflict that has sparked warnings of an unprecedented energy crisis.

Markets have been buoyed since late Monday after President Donald Trump backed down on a threat to destroy Iran’s energy infrastructure and said the two sides were in peace talks.

But while crude prices are down from last week, uncertainty and the virtual closure of the Strait of Hormuz through which around 20 percent of oil and gas passescontinues to cast a dark shadow.

The Numbers

• Brent crude: Edged up 1% to $103.25 a barrel

• WTI: Rose 1.2% to $91.41 a barrel

Talks or No Talks?

Washington presented a 15-point plan to end the war, including Iran giving up its enriched uranium and opening the waterway.

Tehran’s state-run TV reported officials had put forward their own five conditions.

Trump on Wednesday threatened to “unleash hell” if Iran did not strike a deal. But Foreign Minister Abbas Araghchi said his country “does not intend to negotiate.”

However, Trump insisted Iran is taking part in peace talkssuggesting Tehran’s denials are because negotiators fear being killed by their own side.

“They are negotiating, by the way, and they want to make a deal so badly. But they’re afraid to say it, because they figure they’ll be killed by their own people.”

Market Dynamics

Saxo Markets’ Charu Chanana noted: “Pressure on energy prices, shipping flows and broader financial conditions remains one of the few meaningful sources of leverage Iran retains. There is therefore little incentive to relinquish that leverage prematurely.”

But she added: “It would be imprudent to assume diplomacy is absent simply because it is not visible. Markets understand this dynamic, and they also tend to inflect before the political endgame is formally in place.”

Latest Developments

Israel strikes:

• Israel’s military said air defences were responding to missile attacks from Iran, with sirens activated across central Israel, Jerusalem, and the West Bank

• Israeli forces carried out a wave of strikes across Iran, including in the central city of Isfahan

US military impact:

• The US has hit two-thirds of Iran’s production facilities for missiles and drones, and a similar proportion of its naval production, a top officer said

• Iran’s drone and missile launch rates are down by 90%

Gulf tensions:

• Kuwait arrested six people allegedly linked to Hezbollah planning “assassinations”

• Several Gulf countries and Jordan demanded Iraq act immediately to stop attacks from its territory by pro-Iran groups

• Iran’s parliament speaker warned of a possible invasion of an Iranian island

Lebanon:

• Hezbollah chief said negotiations with Israel under fire would amount to “surrender”

• Israeli Prime Minister Netanyahu said forces were expanding a “buffer zone” in southern Lebanon

The Bottom Line

Oil up. Talks denied. Threats renewed. The Strait of Hormuz closed.

Trump says Iran is negotiatingbut is afraid to admit it. Tehran says no.

Markets are watching, waiting, and holding their breath.

{Source: IOL}

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