Oil price fluctuates ahead of Trump’s Iran deal deadline
Oil price fluctuates ahead of Trump’s Iran deal deadline
As the deadline set by US President Donald Trump for Iran to reopen the Strait of Hormuz approaches, global oil prices have shown volatility. Benchmark Brent crude prices surged past $111 (£84) in early trading sessions, oscillating near the $110 mark before stabilizing at approximately $107. This shift reflects uncertainty about the outcome of the impending negotiations.
Trump warned that Iran could face “a whole civilization dying tonight” if it failed to reach a deal by Tuesday, 20:00 Washington DC time. The threat comes amid disruptions to Middle Eastern oil and gas exports, as Tehran escalates its stance against US and Israeli airstrikes since February 28. The Strait of Hormuz, a critical chokepoint, has become a focal point of the geopolitical tension.
“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, underscoring his urgency. Meanwhile, stock markets in the US opened lower, with choppy trading, as investors braced for potential consequences of the standoff.
Ye Lin of Rystad Energy noted that the initial spike in oil prices suggests market concerns over the difficulty of securing a deal with Iran’s firm position. “The war could extend longer than anticipated, making it harder for the US to achieve a swift resolution,” she observed. Tineke Frikkee of W1M added that even if a deal is reached, economic relief may take time. “Oil flows might ease, but they won’t reach their destination immediately,” she explained.
Asian nations, including Japan and South Korea, have taken proactive steps by negotiating with Iran to ensure their vessels can navigate the strait. However, Frikkee highlighted ongoing challenges, such as elevated insurance costs and a competitive bidding process for access. “The fact a ship can pass through is positive, but at what cost? Insurance has risen sharply, and other countries are willing to pay whatever is needed,” she said.
Jamie Dimon, CEO of JPMorgan, warned that the conflict could drive up global interest rates by increasing inflationary pressures. Ahead of Tuesday’s deadline, the UK convened military planners and allies from over 30 countries to discuss securing the Strait of Hormuz post-conflict, with another meeting planned. Disruptions in the vital waterway have already elevated energy costs worldwide, with a fifth of global oil and gas shipments passing through it.
Trump has also called on nations to deploy warships to the region, aiming to safeguard commercial traffic. The situation remains precarious, with the outcome of the negotiations likely to shape both energy markets and broader economic stability.
