Forex▲ Bullish
Brent Holds $80 as Bessent's Hormuz Optimism Meets Skepticism
Brent fell to near $80 after Bessent flagged a possible Hormuz deal. Failure to break below $80 suggests traders are not pricing out the risk premium until Tehran confirms.
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Treasury Secretary Scott Bessent said the United States and Iran could reach a deal as early as Tuesday or Wednesday to reopen the Strait of Hormuz. Speaking to CNBC, Bessent said, “There is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict.” Brent crude fell from around $86 to near $80. US equity futures rallied more than 1%. The 10-year Treasury yield slipped to around 4.66%.
Brent did not break decisively below $80. That failure, several traders said, showed that markets remain reluctant to fully price out the geopolitical risk premium. The immediate reaction reflected relief that diplomacy may be gaining traction. The oil market, however, appeared unconvinced that a lasting resolution is within reach, the traders said.
The missing piece is the question of tolls and sovereignty over the Strait of Hormuz. Asked directly whether Iran would retain the right to charge commercial vessels for passage, Bessent replied that any agreement would ensure “freedom of movement” through the waterway. That formulation leaves considerable room for interpretation. Freedom of movement does not necessarily imply free passage, and it does not address Tehran’s long-standing position that it intends to retain sovereign control and tolling rights once any temporary arrangements expire, analysts at Eurasia Group said. Until that issue is resolved, the gap between Washington’s optimistic messaging and Iran’s publicly stated objectives remains largely intact.