Oil Prices Rise Amid Uncertainty Over Fate of Ceasefire Agreement Between America and Iran

SadaNews - Oil prices have risen from their lowest levels in six weeks amid continued uncertainty about the prospects for a peace agreement to end the Iran war.

Brent crude rose closer to the $93 per barrel mark, after ending Friday's trading at its lowest close since mid-April. West Texas Intermediate was also traded near $89 per barrel.

Over the weekend, the United States and Iran exchanged messages proposing amendments to a draft agreement aimed at extending the ceasefire and reopening the Strait of Hormuz. However, indicators remain unclear regarding the extent to which both sides have made tangible progress toward reaching an agreement.

Previous Optimism Eased Oil Prices

This stalemate follows a wave of optimism regarding the possibility of reaching some form of peace agreement and resuming energy flows through the Strait of Hormuz, which resulted in the first monthly decline in crude oil prices this year.

Brent crude remains over a quarter higher since the outbreak of the war at the end of February, as the near-total closure of the vital waterway has caused unprecedented disruptions in the oil markets.

"Red Lines"

Hamza Al-Kaoud, an independent economist specializing in the Middle East and North Africa, stated that "Iran and the United States are neither backing down nor offering concessions on their red lines to reach an agreement, and some of these issues have not changed since before the war," including issues related to nuclear programs, control of the strait, ballistic missile programs, and sanctions.

Al-Kaoud predicted that oil prices would remain highly sensitive to field developments and statements from political leaders.

President Donald Trump has not spoken on the Iranian file since the White House Situation Room meeting on Friday, where he stated that he expects to announce an agreement to extend the current ceasefire with Iran for 60 days.

Trump had reiterated in a post on social media earlier that day his demands, including suspending Iran's nuclear program and restoring the strait to its previous status as a free international waterway.

Reciprocal Amendments

The semi-official news agency "Tasnim," close to the Iranian Revolutionary Guard, reported on Sunday that the two sides continue to propose amendments to the agreement, but it noted that the U.S. and Iran may ultimately reject those amendments, which could lead to the collapse of the agreement.

Harris Khurshid, head of investments at Chicago-based "Karobaar Capital," said: "Even after the recent sell-off, oil is still trading at relatively high levels."

He added: "This indicates that the market is not pricing in peace yet, but is only factoring in the diminished likelihood of the worst-case scenarios."

At the same time, Israel has conducted its largest incursion into Lebanon in a quarter-century, while "Hezbollah," Iran's strongest regional ally, has intensified its attacks on northern Israel. Tel Aviv is not a party to the talks between Washington and Tehran, and it remains unclear whether it will agree to halt the parallel war it is waging in Lebanon.

Oil Tankers Leave the Gulf Despite Risks

About a quarter of the large non-Iranian oil tankers that were stranded in the Arabian Gulf at the outbreak of the Iran war have been gradually and discreetly leaving.

However, several vessels crossing the Strait of Hormuz have come under attack in recent days, underscoring the "very real" risks faced by ship owners, according to remarks made by Chevron's CEO, Mike Wirth, on Friday.