$100 Oil Price: Geopolitical Scarcity Fears Under Threat

The oil market has found itself at a crossroads, driven by renewed hopes for diplomacy between the US and Iran. US President Trump stated that talks with Iran were continuing and that he believed a settlement would eventually be reached. However, the rhetoric from Washington remains confrontational.

Iran's offer of an olive branch on the Strait of Hormuz has been met with mixed facts and truths, making it difficult to read the situation. Despite this, the market is leaning towards a better supply picture, thanks in part to Saudi Arabia restarting its East-West pipeline.

The Brent crude price closed below $100 for the first time in two weeks, settling at around $98.30 as of Tuesday's close. The oil market has spent much of the past few weeks pricing a risk that physical supply could become considerably tighter, leading to triple-digit prices again.