Trump Talks Down Iran Risk as Oil Prices Hold Above $95

Oil prices have stabilized above $95 per barrel despite ongoing tensions in the Strait of Hormuz, a key shipping lane for global energy. President Donald Trump's comments downplaying the risk of disruptions to oil flows have contributed to this stability.

Commerzbank notes that oil traders are still bracing for a drawn-out conflict, but also see an unlikely normalization of flows. This mixed sentiment is reflected in current prices, which suggest a prolonged period of uncertainty.

The US government's actions may also be contributing to the stability in oil markets. Treasury Secretary Scott Bessent has announced plans to buy back older, harder-to-trade long-dated Treasuries to free up bank balance sheets and help dealers handle new bond auctions.

This move is expected to make Treasury auctions go more smoothly, reducing the risk of yields rising due to supply pressures. By buying back 'off-the-run' bonds, the Treasury reduces the inventory dealers have to warehouse, allowing them to bid more aggressively at new auctions.