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Crude Slides as US-Iran MOU Nears Signing, Key Details Remain Unresolved, RBC Says

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Oil prices extended losses as investors shifted focus to the signing of the US-Iran memorandum of understanding later this week, though major questions remain about the implementation and durability of any agreement, RBC Capital Markets strategists said in a Monday note.

RBC analysts said President Trump has set Friday for the signing of the peace deal, which is expected to restore maritime traffic through the Strait of Hormuz and ease restrictions that have disrupted energy exports from the Gulf for over 100 days.

Market participants have welcomed the prospect of increased crude flows, helping push oil prices lower, but the analysts said that the operational challenges of reopening the Strait could take months to resolve.

"The core MoU tentpoles remain unchanged from April and center around the lifting of the double blockade and the reopening of the Strait of Hormuz," the analysts said.

The US-Iran peace deal is expected to defer the more contentious issue of Tehran's nuclear program, with discussions scheduled to continue over the next 60 days. RBC analysts said a comprehensive resolution could be delayed indefinitely.

However, despite optimism surrounding the deal, RBC said shipping traffic is unlikely to return to pre-crisis levels quickly.

Though vessel movements are expected to increase as tankers seek to leave the Gulf after months of disruption, restoring flows to pre-crisis levels could take longer, particularly if security concerns persist.

RBC analysts said inventories would continue to play a critical role in balancing global oil markets until Gulf producers complete repairs to damaged infrastructure and restore production capacity.

Meanwhile, investors are closely watching negotiations over the release of up to $24 billion in frozen Iranian assets, which analysts view as a key incentive for Tehran to sign the agreement.

The timing and structure of any payments remain unclear. Iranian officials have reportedly pushed to release funds before Friday's signing, while the White House has previously favored a phased, performance-based approach.

Last week, US Treasury Secretary Scott Bessent said that Iranian frozen funds could be used to support reconstruction and repairs to Gulf infrastructure damaged during the conflict.

The control of the Hormuz is expected to prove considerably more complex. Iran has insisted it will retain operational authority over the waterway and has proposed charging a maritime service fee after an initial 60-day toll-free period. The White House has publicly rejected the idea of tolls.

Regional security concerns also remain elevated. Israeli Prime Minister Benjamin Netanyahu is expected to seek freedom to take independent military action against Iran if he believes Israeli security is threatened.

RBC Analysts said future Israeli strikes could not be ruled out, particularly if Tehran seeks to rebuild missile capabilities or expand support for regional proxy groups.

The future of Lebanon and Israel's military presence in southern Lebanon could also emerge as a point of friction between Tehran and Jerusalem.

The bank said investors should look beyond initial market optimism ahead of Friday's signing and focus on the agreement's details.

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