The price of Brent oil reached $100.80 per barrel on Tuesday morning, marking a significant drop of over $6 from the figure of $107.24. This price decrease occurred after traders reacted to conflicting reports regarding the peace negotiations between Iran and the U.S.
Price Fluctuations and Influencing Factors
This price drop followed a 7.6% decline on Monday, which brought the Brent price down to $104.77. Prices initially rose after reports of U.S. airstrikes on Qeshm Island in Iran, near the Strait of Hormuz, but this trend quickly reversed on Tuesday morning.
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The sudden price drop occurred just before a Bloomberg report stated that Iran's Supreme Leader has allowed negotiations on non-negotiable issues. This claim was stronger than the statements made by Masoud Pezeshkpour, the President of Iran, who only referred to granting additional powers to the government.
Uncertainties in Negotiations and Their Impact on Prices
Pezeshkpour did not specify which issues might be discussed, raising questions about the accuracy of Bloomberg's report regarding Iran's statement. At 8:20 AM, Brent experienced another sharp decline, coinciding with reports from Al Jazeera about Washington's confirmation of a draft agreement presented through Qatari mediation.
Additional reports emerged indicating that Washington and Tehran have reached agreements regarding Iran's nuclear program and frozen assets. According to Al Arabiya, a proposal has been made to exchange Iran's nuclear concessions for the release of frozen funds.
However, a senior Iranian official has denied claims of progress in this area, stating that an agreement remains out of reach. Tehran's public stance has always been that their conditions must be met before the Strait of Hormuz is reopened and nuclear negotiations commence.
While Qatar has confirmed that both sides are reviewing proposals, no official agreement has been announced. These conflicting reports well explain the uncertainty present in Tuesday's trading, although it remains unclear what has caused these sharp declines.
By mid-morning, the Brent price had improved by nearly $3 from its session low. However, reported diplomatic advancements have yet to be confirmed, and the Strait of Hormuz remains restricted.
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