SINGAPORE: Oil prices fell on Tuesday, with markets weighing reports of mediation efforts between the US and Iran against an exchange of fresh attacks between the two and threats of a naval blockade of Saudi Arabia by Yemen’s Houthis.
Brent crude futures fell 96 cents, or 1.1 percent, to $88.26 per barrel by 09:30 a.m. Saudi time. US West Texas Intermediate crude was down 73 cents, or 0.9 percent, to $82.50 per barrel, while the more active contract for September delivery slipped 57 cents, or 0.7 percent, to $81.91 a barrel.
“There’s some hope of de-escalation between the US and Iran. Reports are that mediators are proposing a 10-day ceasefire, which could put the Memorandum of Understanding (MoU) back on track,” ING analysts said in a note, referring to the June interim deal.
However, this won’t be easy as major differences remain between Washington and Tehran, while Trump has warned of retaliation after several US soldiers were killed, ING added.
A senior Iranian official told Reuters Tehran had received a proposal from mediators for a 10-day ceasefire in efforts to salvage the deal signed on June 17, intended to pave the way for a lasting agreement to end the war that began on Feb. 28 with US-Israeli attacks on Iran.
