Oil: Flow resumption tempers war premium – Deutsche Bank

FXStreet Insights Team FXStreet

Deutsche Bank reports that Brent Oil initially fell after the US‑Iran memorandum of understanding, as investors faded war‑related economic fears, before reversing to close slightly higher near $79.85. The bank cites US and Iranian officials confirming renewed flows through the Strait of Hormuz and a 60‑day period of free safe passage, while governance and potential future fees remain unclear.

Strait of Hormuz deal supports flows

"Upbeat commentary from US officials also encouraged investors to fade concerns over the economic effects of the war, although an initial tumble in oil prices that followed the signing of the MoU did reverse as the session went on."

"In fact, Brent crude ended up +0.38% higher on the day at $79.85/bbl by the close, after falling as low as $76.45/bbl intra-day."

"An initial decline in oil prices was supported by signals that oil was starting to flow again, with Vice President JD Vance saying yesterday that 12.5mn barrels of oil passed through the Strait of Hormuz the previous night, and that nearly a dozen ships had gone through the US blockade."

"It showed that Iran would make arrangements for the safe passage of commercial vessels, “with no charge for 60 days only”, and that Iran would be in dialogue with Oman “to define the future administration and maritime services in the Strait of Hormuz”."

"President Trump focused on the positives of the interim deal, posting “oil is flowing” and also saying that “We expect a complete Ceasefire on all fronts, including Lebanon, Hezbollah, and Israel”."

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

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