Oil Prices Extend Losses as Iran Offers to Reopen Strait of Hormuz
The European FX news wrap saw oil prices extend their losses as Iran offered to reopen the Strait of Hormuz within seven days if the US lifted its blockade. This proposal was conveyed through intermediaries, reportedly confirmed by Reuters, and sparked a drop in oil prices as markets bet on de-escalation.
Saudi Arabia's readiness to resume crude exports from the Red Sea port of Yanbu also contributed to the decline in oil prices. The US dollar erased some gains as rate hike probabilities for October fell. Stocks, cryptocurrencies, gold, and other risk assets rallied on hopes of de-escalation easing inflation and rate hike bets.
Fars News later denied reports of Iran offering to reopen the Strait of Hormuz, citing Iranian sources. Despite this, oil prices remained under pressure, possibly due to the constraints Trump is facing amid munitions shortfalls and elevated yields. The markets will be focused on de-escalation headlines as that would keep downward pressure on oil prices.