Economy
Oil Market Rises 2% as Trump Rejects Return to Iran Ceasefire Deal Terms
By Adedapo Adesanya
The oil market rose 2 per cent after it was reported that US President Donald Trump is not interested in returning to the terms of a memorandum of understanding reached with Iran in June.
Brent crude futures chalked up $1.86 or 2.1 per cent to $89.70 a barrel, while the US West Texas Intermediate (WTI) crude futures advanced by $1.30 or 1.6 per cent to settle at $83.53 per barrel.
Wall Street Journal reported that the Trump administration has repeatedly told mediators it has no interest in reviving the June agreement with Iran, complicating a flurry of diplomatic efforts this week to restart talks.
The preliminary deal that President Trump signed at the Palace of Versailles and which Vice President JD Vance helped negotiate aimed to reopen the Strait of Hormuz and kick-start talks on Iran’s nuclear programme and an end to the war in exchange for sanctions relief and giving Iran access to its frozen cash around the world. However, it fell apart within weeks after Iran started attacking ships to assert its control over the vital waterway.
Market analysts noted that a lack of progress in talks, combined with continually restricted flows, could have prompted an adjustment of market views.
On Monday, the US announced what it called the “toughest sanctions in history” on Iran, with Treasury Secretary Scott Bessent suggesting that the measures would lessen the need for new major military operations.
In response, Mr Ebrahim Azizi, head of the Iranian parliament’s national security committee, said the sanctions were an “inhumane and hostile act” that had nevertheless lost their effectiveness.
Flows through the Strait of Hormuz improved slightly on Wednesday, with 10 commodity vessels transiting the waterway, up from recent lows but still below the 10-day average of 15, according to Kpler data. Vessels exiting the strait included a medium-range fuel tanker, a bitumen tanker and a bulk carrier.
The Strait of Hormuz handled about one-fifth of global daily oil and liquefied natural gas supplies before the conflict began in late February.
Meanwhile, state-owned Kuwait Integrated Petroleum Industries Co. restarted all three crude units at its 615,000 barrel-per-day Al-Zour oil refinery at 60 per cent capacity as of August 19. The refinery had come under attack by Iranian drones in May.
Geopolitical tensions escalated after Russia warned it could strike British military targets inside and outside Ukraine in response to Ukrainian attacks on Russian territory using British-supplied long-range cruise missiles.
President Trump downplayed the development, saying that Russian President Vladimir Putin will not attack a North Atlantic Treaty Organisation (NATO) country.
