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Trump Says Iran Deal Nears Completion, Sees Strait of Hormuz Shipping Recovery

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US President Donald Trump said Wednesday that Iran is prepared to finalize a nuclear agreement and that a reopening of the Strait of Hormuz could help stabilize global energy markets.

Trump made the remarks during a press conference at the G7 Summit in France.

Trump signaled that the Memorandum of Understanding may be signed soon, with nuclear negotiations set to continue for another 60-day period.

"If it doesn't get done in 60 days, that's alright, we go back to bombing," Trump said, adding, "... if they don't honor that, we'll probably go back to bombing them until they honor it."

Trump expressed hope that military action would not be necessary.

On the Strait of Hormuz, Trump said shipping activity has already started recovering. "Maritime traffic through the Strait of Hormuz has already increased very substantially, and a normal flow of energy will resume in the coming days...," Trump said.

"On Sunday, we reached an agreement with Iran that achieves everything we set out to accomplish... ending the current conflict, reopening the Strait of Hormuz, and preventing Iran from ever obtaining a nuclear weapon," Trump said.

Trump said Iran appears ready to move forward with the agreement. "We're going to most likely sign a deal, they want to sign a deal and they've been acting very appropriately," Trump said.

Trump said the agreement would require Iran to permanently forgo nuclear weapons and related activities. He added that Tehran agreed it would "neither produce nor procure a nuclear weapon."

He added that technical discussions on the removal of all enriched material stockpiles in Iran will begin "immediately."

Trump also noted the decline in oil prices as a key benefit of easing tensions in the Middle East.

"Oil is dropping like it has never dropped before," Trump said, adding that prices had fallen by as much as $7 to $8 per barrel as concerns about regional disruptions eased.

Answering a question about a proposed US$300 billion fund and whether the US would provide financial support to Iran, Trump said Washington would not contribute money directly and that any benefits would depend on Tehran adhering to the agreement. "Only if they're doing things right," Trump said.

Trump said the US continues to hold Iranian assets that were frozen under previous restrictions. "We have taken a lot of their money, and we have their money ... It's not our money, it's their money, and we froze it at a certain point in time," Trump said, adding, "I guess we're going to have to give it back."

On Israel, Trump a copy of the MoU had been sent over to Israel as well.

"We have a little dispute over in Lebanon," Trump said, adding, "but I feel very bad for Lebanon."

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US Oil Update: Crude Falls After US-Iran Peace Deal Signals Supply Boost

Crude oil futures settled lower in after-hours trading on Tuesday, extending losses from the previous session, as investors weighed the prospect of increased Iranian crude exports and a gradual reopening of the Strait of Hormuz following a peace agreement between the US and Iran.Front-month West Texas Intermediate crude futures tumbled 5.1% to $76.62 per barrel, while Brent futures plunged by 4.4% to $79.48/bbl.Soojin Kim, research analyst at MUFG, said optimism about a gradual recovery in Gulf exports has reduced the geopolitical risk premium built up during the conflict.On Tuesday, President Trump said that he's open to sending details of the peace agreement with Iran to members of Congress, according to media reports, as US lawmakers from both parties raise questions, saying they should vote on any final deal.The preliminary deal would extend the US-Iran ceasefire for 60 days and create a framework for future negotiations over Tehran's nuclear program and other issues. Though the agreement's text has not been released, Trump has said he would unveil details on Friday.A senior US official, in an emailed response to, described the deal as "performance-based," noting that Iran can access the agreement's benefits only if it abides by its commitments.The conditions include not pursuing a nuclear weapon, neutralizing its enriched uranium and not interfering with traffic in the Strait of Hormuz, the official said.Though market participants have welcomed the prospect of increased crude flows via the Strait of Hormuz, RBC Capital Markets analysts said the operational challenges of reopening the Strait could take months to resolve.There are about 118 laden tankers trapped in strategic waterways, according to Kpler. However, though the vessels could leave within 10-15 days, Kpler analysts said they could deliver an early spike in transits without boosting regional production.Meanwhile, market participants are still grappling with whether the Strait has been mined, whether Iran retains de facto operational control, and how any transit tolls would be structured and collected.RBC Capital Markets analysts said the core MoU tentpoles remain unchanged from April and center on lifting the double blockade and reopening the Hormuz.On the supply front, the US will reportedly also allow Iran to immediately begin selling oil and fuel under the memorandum of understanding between the two sides, reached to end the conflict.

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Iranian Oil Tankers Reposition Ahead of Potential Oil Export Resumption, Bloomberg Analysis Says

Iran-linked oil tankers have begun repositioning as Tehran moves closer to an agreement that could quickly reopen access to international oil markets, according to a Bloomberg analysis on Tuesday.Attention in the oil market has shifted to the potential return of Iranian barrels as traders assess the impact of any easing in US restrictions. About 68 million barrels of Iranian crude remain stranded under the blockade, according to a Kpler estimate cited by the analysis.Under a draft agreement nearing completion, Tehran could reportedly receive sanctions waivers that would allow oil exports to resume without delay once the deal is signed.Recent vessel-tracking data indicated that four ships resumed transmitting location signals and appeared to move through the Gulf of Oman and the Strait of Hormuz. Two of the vessels are supertankers with a capacity to transport about 2 million barrels of crude each, according to the analysis.Several tankers that had been anchored near Chabahar also left the area in recent days. The destination of at least three of those vessels could not be immediately determined, the analysis added, citing TankerTrackers.com.Monitoring Iran's tanker fleet remains challenging because vessels often disable tracking systems and are frequently affected by signal interference. Ongoing regional tensions have added another layer of complexity to vessel-tracking efforts, the analysis added.Iranian media reported that efforts to remove the US naval blockade, which has been in place since mid-April, have entered the implementation stage. The Iranian Students' News Agency cited the Deputy Foreign Minister as saying the process is already underway.Shipping restrictions forced a number of Iranian tankers to remain near Chabahar after access to key export routes became limited. Reports said US naval forces also confronted some vessels attempting to move through the blockade in recent weeks.After reactivating their tracking signals, two fuel carriers crossed the Strait of Hormuz, with one continuing through the Gulf of Oman and another indicating a destination near Oman.The analysis said Washington and Tehran are expected to sign an agreement on Friday that would end both Iran's blockade of the Strait of Hormuz and the US blockade of Iranian shipping.

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Update: Market Chatter: US Intel Assessments Say Iran Gains Ability to Control Strait of Hormuz

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