Brent: Price slips on Hormuz deal hopes – Rabobank

Rabobank’s Global Daily notes Brent futures fell to around $79 as reports suggested the US, Iran and Oman are close to a temporary deal to reopen the Strait of Hormuz. The bank highlights that the structure of this 60‑day arrangement resembles a previous agreement that collapsed after renewed attacks, leaving a long and risky road ahead.

Oil reacts to tentative Hormuz accord

"Phil Connors has woken up to another instance of the same day. The US, Iran and Oman are said to be close to a new deal to reopen the Strait of Hormuz. Axios reports that the US aims for an announcement today. So, Brent futures dropped to $79/barrel and equity markets rallied further, for the S&P 500 to set a fresh record high."

"The reported deal could just as well have been written a couple of weeks ago. Axios prints that the deal includes an inbound shipping route through Iranian waters and outbound shipping via the Oman side, while parties work to clear mines from the middle of the strait. No tolls or fees would be charged for the 60-day period covered by this deal. That all looks very similar to the previous deal – that was torpedoed by renewed attacks on ships."

"Even if this deal isn’t immediately sunk by a drone or missile strike, there is a long and risky road ahead. Negotiations are currently clearly focused on preventing new escalation, and the temporary deal does not offer permanent solutions for the key sticking points."

"So, President Trump may have to pick between a deal on Iran’s terms or escalating. That, in turn, suggests it could be matter of time before Trump expresses his frustration with the negotiations again, and we may be in for another few weeks of winter."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)