Update(11:50ET): The last hour has seen a series of statements out of Iran which pour cold war on the recent ‘peace optimism’ coming out of Western headlines, as well as Gulf-sourced reports. This has moved oil prices higher. First, on Tuesday a top Iranian security official said as follows:
Iran’s Security Chief Rezaei says they asked the Americans to provide a clear and explicit response to Iran’s conditions, and they have not provided it to this day, but they may provide this response in the future, reports Al Mayadeen
And in confirmation of this, Iran’s FM then issued the following:
Iranian Foreign Minister Araghchi says the claim of US VP Vance meeting with Iran’s Security Chief Rezaei is baseless media speculation and there are no plans for such a meeting, reports Irib News.
The day prior saw claims out of the Gulf of some level of a ‘nuclear breakthrough’ in indirect talks. Tehran has denied this as well, saying Washington and its allies keep floating fake news.
The situation remains stalemated, as “Iran has presented its seven conditions and are waiting for the US response, but their initial response was not enough for Iran,” according to state media.
* * *
Brent traded around $91 a barrel and WTI around $85 a barrel as traders continued to assess efforts to de-escalate the Iran war and restore Middle East energy flows. The good news is that US gasoline prices have dipped below the politically sensitive $4-a-gallon level, just weeks before one of the year’s busiest travel periods: Thanksgiving.
Let’s begin with overnight diplomatic signaling. President Trump said Monday that further strikes would be unnecessary, though US forces remain “locked and loaded,” adding, “Iran, militarily, is effectively over. We’re just keeping it at the status quo, and we’re doing that really at the behest of countries that are their neighbors.”
Trump’s comments came shortly after his conversation with Qatar’s Prime Minister and Minister of Foreign Affairs Sheik Mohammed bin Abdulrahman bin Jassim Al-Thani.
Eurasia Group analysts Gregory Brew and Clayton Allen told clients on Monday that “the political window for escalation has closed.” They lowered their odds of further escalation in the Gulf region to 30% from 60%.
The analysts said the revision was “based on evidence of increasing political constraints on Trump following last week’s midterm elections and the mounting opposition from inside the administration and the Republicans” to another round of all-out hostilities.
Plummeting oil prices have pushed pump prices lower in recent weeks. According to AAA, the national average for regular gasoline dipped below $4 a gallon.
AAA GasÂ
AAA Diesel
This comes just over two weeks before Thanksgiving, one of the year’s busiest travel periods of the year. AAA has not yet released its forecast for this season, but last year it projected that around 82 million Americans would travel, including 73 million by car.
One of the strongest indicators of easing fuel-market tightness is the narrowing of gasoline and diesel crack spreads.
This potentially paves the way for further relief at the pump as crude oil prices continue to retreat, offering welcome savings for consumers… just a little too late for the Republicans.
