Oil Prices Slip on Iran-US Diplomatic Hopes
Oil prices retreated on Friday as reports emerged of potential progress in US-Iran relations. According to Iran's foreign minister, Abbas Araghchi, his country had submitted an offer to Washington that could reopen the Strait of Hormuz to tanker traffic within seven days.
The news sparked a brief rally in oil prices earlier this week after it seemed there would be no breakthrough at the UN General Assembly in New York. However, prices fell back on Friday as analysts questioned the sincerity of Iran's offer.
Patrick O'Hare, an analyst at Briefing.com, said that 'it is a dubious offer considering Iran hasn't changed its conditions from before.' He added that investors would need to see tangible progress for oil prices to stabilize.
The Strait of Hormuz closure has pushed up government bond yields as inflation fears continue. The benchmark US 10-year Treasury yield hit its highest level since 2007 on Thursday, while Japan's government bond yields also reached multi-year highs.