Oil & Energy
US Oil Update: Crude Settle Lower as Vance Signals Progress in Iran Talks
Crude oil futures slipped in after-hours trading on Tuesday after Vice President JD Vance indicated that the US and Iran were making progress in peace talks, easing concerns over potential supply disruptions from the Middle East.Front-month West Texas Intermediate crude futures eased by 0.34% to $104.04 per barrel, while Brent futures were down 0.91% to $111.08/bbl.On Tuesday, US Vice President Vance reportedly said that the US and Iran have made significant progress in their talks and that neither side wants to see a resumption of the military campaign."We think that we've made a lot of progress. We think the Iranians want to make a deal," Vance reportedly said at a White House briefing."The uncertainty surrounding talks, sanctions policy, and the duration of supply disruptions continues to keep energy markets volatile despite the temporary easing in geopolitical tensions," said Soojin Kim, research analyst at MUFG.On Tuesday, President Trump said he was "an hour away" from deciding whether to attack Iran before he was convinced to postpone the strike for a few days.Trump's remarks come a day after he claimed in a social media post on Monday that the US was delaying a previously unannounced strike planned for Tuesday because several Middle Eastern leaders asked him to "hold off" in light of ongoing discussions with Iran."One might think the oil market would become increasingly numb to these headlines. However, the scale of supply disruptions is significant and growing more concerning each day that oil flows remain halted," ING strategists said in a note on Tuesday.However, Iran's deputy foreign minister for legal and international affairs Kazem Gharibabadi reportedly rejected any consideration for surrender, saying Tehran is united and ready to confront any military aggression.The US "says it has 'temporarily' stopped the attacks on Iran to give negotiations a chance, but at the same time speaks of readiness for a massive offensive at any moment," Gharibabadi reportedly said, adding that Trump's remarks mean calling "threat" a "peace opportunity."The ongoing Middle East conflict has effectively closed the Strait of Hormuz, a critical waterway that handles about 20% of global oil and liquefied natural gas supplies, creating the world's largest oil supply disruption, according to the International Energy Agency.Iran unveiled a new body, the Persian Gulf Strait Affairs Authority, on Monday to oversee activities related to Hormuz. The agency said it would issue guidance to vessels transiting the waterway, including emails outlining passage rules and regulations.Saxo Bank strategist said traffic via the Strait remains only a fraction of pre-war levels, despite the waterway accounting for about one-fifth of global oil supply.On Tuesday, the US sanctioned over 50 entities, including oil and gas tankers as well as an Iranian foreign currency exchange, in its continued bid to get Tehran to agree to a deal and reopen the Hormuz.