Rabobank’s Molly Schwartz notes that crude Oil has reacted sharply to shifting US–Iran headlines, with prices rising to $72 per barrel, the highest since early August. She highlights that markets are focused on whether negotiations deteriorate into military confrontation, as Washington has moved significant assets into the region, and that the next 10 days could be critical for geopolitical risk premia in Oil.

Crude tracks US–Iran negotiations closely

"A brief glance at crude oil the past few weeks tell a story about the headlines. Negotiations going good=crude oil down a buck, going bad=right back up. The past few sessions are saying that negotiations are going bad, as crude is up to $72/bbl—its highest level since early August."

"It could, of course, be sooner than that—perhaps even this weekend. And the US appears fully prepared to take military action if necessary, having moved significant military assets into the region—the most since the 2003 Iraq invasion."

"As IAEA (International Atomic Energy Agency) Director General Rafael Mariano Grossi told Bloomberg on Thursday, obtaining access to those sites and determining the current state of Iran’s nuclear capabilities are crucial prerequisites for any agreement."

"Even though Grossi sounded cautiously optimistic (emphasis on cautious) that Iran would grant access and that a diplomatic solution is on the horizon, Tehran must follow through sooner rather than later—preferably within the next 10 days."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)