Oil Prices Dip as Iran Talks Continue

Oil prices have fallen as talks progress over a permanent end to the Iran war. Brent crude, the international standard, has traded down $1.55, or 2%, to $79.02 per barrel, while the price for a barrel of U.S. crude has fallen 74 cents to $75.11. High-level negotiations in Switzerland between the U.S. and Iran concluded early June 22, with lower-level technical talks set for the rest of the week. Mediators Qatar and Pakistan reported “encouraging progress” was made during the negotiations. However, analysts warn that moving towards a more permanent deal will be challenging, with real risks of a flare-up in hostilities. The Strait of Hormuz, a key waterway for oil and gas transport, was shut again over the weekend, according to Iran, but the U.S. said that traffic had continued. The situation remains fragile, with energy flows in the strait likely to recover only gradually. The government is set to release its May personal consumption expenditures price index later this week, which will provide further insight into inflation trends. Other recent inflation data has shown that prices in the U.S. have risen significantly, leading to expectations of a rate hike before the end of the year. Meanwhile, global markets have been reacting to the news, with the FTSE 100 rising 0.5% and the Nikkei 225 jumping 1.6% to an all-time record high.