Donald Trump says talks with Iran over the Strait of Hormuz and its nuclear program resume Monday, after he called off a planned strike at the urging of Saudi Arabia and other US allies. Brent crude fell as the shift raised hopes of de-escalation, even as Iran said it is not yet negotiating directly with Washington.
Donald Trump said talks with Iran will resume Monday afternoon, after he called off a planned strike partly at the request of Saudi Arabia and other US allies in the Middle East. According to Rigzone: "It would have been the biggest attack since World War II," Trump told reporters Sunday aboard Air Force One. Brent crude, the international oil benchmark, fell 5% to $83.53 a barrel as the trading week opened in Asia.
Brent slides further in early trading
Brent futures for October dropped as much as 7.3% to $81.55 a barrel in early Monday trading, Rigzone reported, after surging more than 20% in July. Trump said Saudi Arabia believed a deal on the Hormuz Strait and Iran's nuclear program was imminent. The renewed push toward diplomacy follows sharp swings in crude oil markets tied to the conflict.
Oman talks in "final stages," direct US channel stalled
Iran's foreign ministry spokesperson Esmaeil Baghaei said Tehran was not currently negotiating with the US, adding that talks with Oman were focused on a temporary route to resume shipping through the strait. Iranian foreign minister Abbas Araghchi said the Oman negotiations were in their final stages. Baghaei added that a deal with Oman alone would not be enough, since a continuing US naval blockade would leave the strait's status quo unchanged.
Ceasefire unravels amid regional pressure
The diplomatic reset follows the collapse of an April ceasefire and a June 17 memorandum of understanding, under which shipping through the strait was to gradually return to prewar levels. That agreement broke down after Iran attacked ships using the strait's southern route past Oman's coast, prompting US strikes on Iran and retaliatory missile and drone attacks on regional US bases.
Tehran fired ballistic missiles at a US military base in Jordan as recently as Tuesday night, according to Rigzone. A diplomat briefed on the talks said officials from Qatar, Saudi Arabia and the United Arab Emirates called their US counterparts to urge continued diplomacy over strikes. Before the war, the strait carried a fifth of the world's oil.
Tehran, however, said its policy on the strait remains unchanged, leaving the ceasefire's fate tied to the outcome of the Oman talks alone.
Sources: Financial Times, Rigzone, Investing.com
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