Crude oil futures rise as Vance declines to give timeline to end US-Iran conflict

On Friday, crude oil futures experienced a rise as US Vice President JD Vance declined to provide a timeline for the resolution of the US-Iran conflict. At 9:29 am, Brent oil futures were trading at $96.03, a 0.53 percent increase, while October crude oil futures on WTI were at $92.04, up by 0.81 percent. September crude oil futures on the Multi Commodity Exchange (MCX) opened at ₹8681, up 0.44 percent from the previous close of ₹8643, and October futures opened at ₹8377, a 0.26 percent increase from the previous close of ₹8355.

Vance, speaking to reporters in Washington, stated that the US had ended major combat operations with Iran. However, he noted that there is still no active shooting occurring and added that he does not know when Iran would cease targeting commercial shipping. He further indicated that there would be no negotiations with Iran as long as the country continues to pose a threat to commercial vessels.

This sentiment was echoed by ING Think's Head of Commodities Strategy, Warren Patterson, and Ewa Manthey, the Commodities Strategist, in their Friday commodities analysis. They noted that oil prices remained elevated, with ICE Brent holding above $95 a barrel, despite a recent uptick in hostilities between the US and Iran. This included Iran's firing of missiles into neighboring Gulf countries.

However, the rally in crude prices may falter if the Strait of Hormuz remains open for shipments. According to reports, Iraq was the highest exporter of oil since the start of the US-Iran war in August, exporting a total of 2.35 million barrels a day, with around 2.26 million barrels a day coming from southern routes. This would need to eventually pass through the Strait of Hormuz.

Saudi Arabia maintained its official selling price for its top-grade Arab Light oil at a $2 barrel discount for October loadings, which was not expected to increase, indicating that the market may not be as tight as previously believed.