Oil prices are trading sharply lower after Axios reported that US President Donald Trump may grant Iran additional time to reach a diplomatic resolution to the conflict before resuming strikes against the country.

Brent crude, the international benchmark, is down 2.61% at $110.47 per barrel, while West Texas Intermediate (WTI), the US benchmark, has fallen 3.05% to $100.94 per barrel.

On Saturday, US Secretary of State Marco Rubio had already indicated that no decision had yet been taken on further strikes following the US midterm elections, scheduled for Tuesday, 3 November, and that President Trump favours a diplomatic solution to the conflict. The prospect of negotiations has tempered fears of a fresh military escalation, even as attacks on vessels near the Strait of Hormuz continue.

On Sunday, the UK Maritime Trade Operations (UKMTO) reported receiving notification that a vessel had been struck in the Strait of Hormuz, following a Friday attack on a liquefied natural gas (LNG) tanker. The organisation also reported that a second vessel was hit east of Ras Al Khafji, in Saudi Arabia, within the Persian Gulf.

For Florence Schmit, senior energy analyst at Rabobank, “this is a temporary price correction,” she told Bloomberg, noting that current rhetoric suggests a fresh escalation in the Middle East remains possible and could push oil prices higher.

Goldman Sachs has revised upward its oil price forecasts for the end of this year and for 2027, citing heightened supply risks, joining a number of other financial institutions that have raised their estimates after months of conflict in the Gulf.

The US investment bank now projects Brent will reach $105 per barrel in December, up from its previous estimate of $90 per barrel, and will average $88 per barrel in 2027, approximately 10% above its prior forecast, according to Bloomberg.

Brent gained 14% in October and reached six-month highs, even as Middle Eastern oil supplies recovered to levels close to those recorded before the conflict began.

Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=557116