Oil prices reported a net fall on Monday after President Donald Trump announced that negotiations between the United States and Iran would resume, despite a denial from Tehran.
( EFE )
North Sea Brent crude for October delivery fell 4.73 percent to $83.77 a barrel. Its American equivalent, West Texas Intermediate crude for September delivery, lost 5.11 percent to stand at $80.34 a barrel.
Following the line he has taken since the war with Iran began in late February, Trump threatened the Islamic republic with massive bombings before reversing course and assuring on Sunday that negotiations with Tehran would resume within hours. He reiterated on Monday that the United States was negotiating with Tehran at that very moment.
Market expectations and shipping routes
Robert Yawger, an analyst at Mizuho USA, told AFP that the market appeared to be betting on a framework agreement similar to the one concluded on June 17, which would clear the way for a resumption of oil flows in the Middle East. Maritime shipping traffic in the region had improved following that earlier deal.
However, the resumption of hostilities in July caused a fresh drop in maritime traffic in the Strait of Hormuz, an essential passage for global hydrocarbon trade, as well as an increase in risks in the Red Sea. A spokesperson for Iranian diplomacy stated on Monday that Tehran was not negotiating with the United States at this moment, but maintained talks with Oman to secure passage through the Strait of Hormuz.
