Progress in negotiations reduces risk premium, pushing Brent down 1.61% to $79.27 per barrel amid easing stagflation concerns.
Brent crude reversed earlier gains, dropping 1.61% to $79.27 per barrel as US-Iran talks progressed, reducing fears of supply disruptions at the Strait of Hormuz. The decline follows last week’s sharp price drop, driven by an interim deal and improved traffic through the critical chokepoint.
Markets had priced out stagflationary risks, with inflation swaps collapsing alongside oil prices. While the roadmap includes a 60-day timeline for a potential deal and conflict mechanisms, analysts caution that the Middle East situation remains fragile.
The immediate reaction reflects relief over reduced geopolitical tensions, though traders remain watchful for further developments in the negotiations.