Brent: Cautious trade with geopolitical risks – Rabobank

Rabobank's Bas van Geffen has observed that negotiations to reopen the Strait of Hormuz are moving slowly, with Iran imposing new conditions on the United States, keeping geopolitical risk in the oil sector elevated. Brent futures began the week only slightly higher, as traders are hesitant to take large positions due to the back-and-forth headlines surrounding Iran, the US, and regional tensions.

The talks between Iran and Oman on Hormuz reopening are reportedly progressing, but Iran is continuing to keep the US at arm's length. Negotiators claim that a deal to establish a safe shipping route is close, but Iran may now be assessing how much it can demand from the US in return. Iran has introduced fresh demands over the weekend, demanding the US fulfill several conditions to reopen the strait, including ending hostilities, withdrawing troops, paying billions in war damages, and lifting sanctions.

The strait remains a crucial point of geopolitical leverage until alternative oil export routes are fully operational.