Oil deepens after Trump indicates opening of Hormuz

Oil prices deepened their fall this Friday (29), after Donald Trump indicated the reopening of the Strait of Hormuz. The market is also optimistic that the US and Iran are moving closer to a deal.

The North American president is meeting with advisors in the White House Situation Room this Friday to decide whether he will accept an agreement with Iran, as announced by the leader himself on the Truth Social network.

At around 12:40 pm, Brent oil fell around 2%, to US$90 per barrel. WTI, a reference in the USA, fell 1.9%, to US$ 87 per barrel.

If agreed, the interim memorandum of understanding (MoU) between Tehran and Washington would lift parallel blockades in the Strait of Hormuz and guarantee free navigation. The document would also initiate a 60-day waiting period to overcome key obstacles to a definitive peace resolution - namely, the fate of Iran's nuclear arsenal.

On Thursday (28), American officials told CNN that the United States and Iran have reached a tentative agreement to extend the ceasefire for 60 days and unblock the Strait of Hormuz, but President Donald Trump has yet to approve it.

However, Iran's Tasnim news agency, citing a source close to the negotiating team, said the text of a possible memorandum of understanding between the countries had not yet been finalized or confirmed.

"These headlines contributed to a sharp drop in the price of oil yesterday," Deutsche Bank said in a note.

Overall, oil prices fell more than 18% in May, the biggest monthly drop since the start of the Covid-19 pandemic in March 2020, Deutsche Bank added.

Mohit Kumar, chief European economist at investment firm Jefferies, said there were still risks in executing any deal and that "it is not clear whether there is a united front in Iran to make decisions."

"But we are optimistic that we will reach a deal that opens the Strait and eases pressure on oil prices and the global economy," Kumar added.

*With information from CNN Internacional

Source: CNN