Oil Prices Fluctuate as US-Iran Ceasefire Extension and Nuclear Talks Reported
Oil prices have seen a notable decline after a report indicated a breakthrough in discussions between the United States and Iran, contingent on President Donald Trump's approval. According to Axios, officials have reached an agreement concerning an extended ceasefire, which led to the price of Brent crude dropping to a low of $93.36 from an earlier high of $98, before settling around $94.
This price movement occurred despite earlier US attacks on Iran, specifically targeting a military installation in Bandar Abbas, a strategic port city. These strikes unfolded amidst an existing ceasefire intended to facilitate negotiations aimed at concluding the three-month conflict. This protracted conflict has effectively closed the Strait of Hormuz, a critical waterway through which approximately a fifth of the world's oil and liquefied natural gas (LNG) supplies typically pass, thereby contributing to increased global energy costs.
Since the initial US and Israeli airstrikes on Iran on 28 February, Tehran has consistently threatened to target vessels utilising the shipping route. The global energy markets have displayed considerable instability since the conflict's inception, with Brent crude briefly surging to approximately $120 a barrel from its pre-war level of around $70.
Axios reported that the proposed agreement includes a 60-day ceasefire extension and the commencement of talks regarding Tehran's nuclear programme. This understanding requires final endorsement from President Trump, who has reportedly requested additional time for a decision. The recent US strikes, described by Washington as self-defence, mark the second such action against Iranian targets within three days. US Central Command (Centcom) also confirmed the downing of four Iranian drones posing threats around the Strait of Hormuz, alongside earlier strikes on missile sites and vessels attempting to lay mines in the strait.
Iran has denounced these recent attacks as a "grave violation of the ceasefire" and has vowed to retaliate against "any act of hostility." Separately, Kuwait's military stated it was intercepting "hostile missile and drone threats," though further details were not provided.
