Oil Prices Soar on Fading US-Iran Peace Hopes
Oil prices have reached near three-week highs as hopes for a US-Iran peace deal fade. The conflict in the Middle East has led to concerns about prolonged energy supply disruptions.
The price of U.S. West Texas Intermediate (WTI) crude futures hit $84.99 a barrel, its highest since July 31. Brent crude futures were up 20 cents to $91.07 a barrel, also reaching their highest in nearly three weeks.
Analysts expect deal uncertainty to support prices, with ING analysts citing U.S. President Donald Trump's decision not to extend the U.S.-Iran peace agreement as a key factor. Trump had previously labelled an interim deal signed in June 'over', and Iran has said it will keep the Strait of Hormuz closed until its conditions are met.
Top Iranian negotiator Mohammad Baqer Qalibaf stated that Iran will continue to adopt a 'fully offensive' military posture, while DBS Bank's head of energy research Suvro Sarkar predicts that the lack of any deal will impact oil price expectations further out in 4Q and even in 2027.