(June 23): Oil steadied as traders weighed early progress in peace talks over the Iran war, which included a US waiver allowing some sales of barrels from the Islamic Republic.
West Texas Intermediate traded near US$74 a barrel after dropping 2.6% in the previous session. Brent closed just below US$78. The 60-day licence permits the sale of some Iranian oil and petroleum products, citing “productive talks” in Switzerland, offering Tehran a crucial economic lifeline.
US and Iranian officials both cited progress in the first round of talks towards a lasting agreement to end the conflict that started at the end of February, but some discrepancies have emerged. Vice President JD Vance said Iran agreed to allow nuclear inspectors into the country, a claim disputed by Tehran.
There’s expected to be protracted wrangling on Iran’s nuclear capabilities as talks continue, along with the status of a ceasefire in Lebanon between Israel and Hezbollah and the safe reopening of the Strait of Hormuz. The near-closure of the waterway choked off energy supplies and upended markets.
“There is still a long road ahead in negotiations, and the market may be pricing in a surplus before it arrives, just as it priced in a deficit before barrels were actually lost,” said Rebecca Babin, the managing director and a senior energy trader of CIBC Private Wealth. “Crude has a habit of overshooting.”
Shipments of oil out of Persian Gulf have ticked up recently, including 30 million barrels from Iran that departed for Asia in the past week. Other major producers in the region have also found workarounds to get crude out.
See also: Qatar brings empty LNG ships through Hormuz as exports rise
Uploaded by Isabelle Francis
