Oil falls as U.S. touts progress on Iran deal

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Oil falls as U.S. touts progress

Highlights

The U.S. says talks with Iran are making progress, but Rubio warned that a deal could take several days.
The main sticking points are $24 billion in frozen assets, the Strait of Hormuz and highly enriched uranium.
Brent is trading around $97.86, WTI has slipped to about $91.85, reflecting expectations of possible de-escalation.

Deal may be close, but obstacles remain

Bloomberg reported that the United States says negotiations with Tehran are continuing despite renewed clashes. President Donald Trump said work is underway on extending the ceasefire and reopening the Strait of Hormuz, while Secretary of State Marco Rubio warned that finalizing any deal is likely to take several more days.

The key sticking points remain unchanged. One of them is Iran’s $24 billion in frozen assets: according to Iran’s semi-official Tasnim news agency, Tehran wants access to half of that amount after an agreement is signed. In the U.S., such a step could face resistance from Iran hawks who fear Washington may offer too many concessions.

Other obstacles include the rules for vessel passage through the Strait of Hormuz and the future of Iran’s stockpile of highly enriched uranium. The U.S., Europe, and Arab states are demanding free passage through the strait, while Iranian officials want to charge fees for navigation services. Trump is also seeking a commitment from Iran to transfer or destroy uranium stockpiles that Washington sees as a potential basis for a nuclear weapon.

Oil reacts to mixed signals

The oil market remains highly sensitive to every report from the region. Brent had climbed toward $100 a barrel after falling more than 7% on Monday: hopes for a deal supported equities, but fresh strikes brought geopolitical risk back into prices.

The latest market snapshot showed prices turning lower again: WTI traded at $91.85, down 2.24%, while Brent stood at $97.86, losing 1.73%. That suggests investors are weighing two scenarios at once: a possible diplomatic agreement and the risk of further escalation.

The U.S. military said it carried out self-defense strikes in southern Iran, targeting missile launchers and vessels that it said were attempting to lay mines. Iran’s Islamic Revolutionary Guard Corps, in turn, said it had fired at an F-35 fighter jet and several drones after they entered Iranian airspace.

Hormuz remains the main driver for oil

The situation around the Strait of Hormuz continues to define the short-term direction of the oil market. Any progress in U.S.-Iran talks reduces the risk premium, but fresh military action quickly brings pressure back into prices and increases volatility.

Until an agreement is signed, investors are likely to treat statements from both sides with caution. Even with signs of diplomatic progress, the market is not ready to fully rule out renewed escalation, especially while disputes remain over freedom of navigation, Iran’s frozen assets, and its nuclear program.

In an earlier report, we noted that oil gains as U.S. strikes add uncertainty to Iran talks.

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