Finance1 min read

Oil price falls amid hope of a breakthrough to end Iran war

By · Via The Guardian Business · Published by Everything Blog

In short

The diplomatic push gained momentum after Iranian Foreign Minister Abbas Araghchi confirmed that third-party consultations are underway and conditions have been delivered to Washington. Qatari intermediaries also worked over the weekend to broker the release of over $6 billion in frozen Iranian assets to incentivize the reopening of the Strait of Hormuz. Furthermore, reports indicate Iranian Supreme Leader Mojtaba Khamenei granted his government authority to pursue talks with the United States. While the resulting decline in crude brings welcome relief to global inflationary pressures, market observers warn that the risk of renewed conflict persists.

Key points

  • Diplomatic progress toward concluding the eight-month conflict has eased pressure on sove…: Diplomatic progress toward concluding the eight-month conflict has eased pressure on sovereign debt markets and boosted travel equities.
  • Supreme Leader Mojtaba Khamenei reportedly authorized the Iranian administration to condu…: Supreme Leader Mojtaba Khamenei reportedly authorized the Iranian administration to conduct negotiations directly concerning relations with the United States.
  • Global markets face ongoing uncertainty despite lower energy prices due to Donald Trump's…: Global markets face ongoing uncertainty despite lower energy prices due to Donald Trump's threats of aggressive action if talks fail.

Sources checked by our analysis pipeline: 1

The oil price fell to its lowest level in over two weeks on Monday, amid new hopes of a breakthrough to end the Iran war.

Brent crude, the international benchmark, dropped by more than 6.5% to as low as $105.55 a barrel, the lowest since 16 October, sending shares in airline companies higher and pushing down government borrowing costs.

Oil prices fell after Tehran revealed that contacts between Iran and the United States to end their eight-month war are continuing.

“Consultations through mediators are very intensive. We have presented our conditions and proposals and everything depends on the political rationality of Washington,” Iranian foreign minister Abbas Araghchi said, according to state media outlet IRNA.

Over the weekend, Qatari officials tried to negotiate the release of more than $6bn in Iranian assets, so that Tehran might allow the strait of Hormuz to reopen.

Donald Trump had earlier taken a belligerent tone, telling voters in Iowa that Iran would receive “the hammer” unless there was progress.

“The only reason why I’m not finished with Iran is I want to be nice. I…

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