Oil prices rise after US-Iran talks break down

The oil market was plunged into uncertainty again when planned talks between Washington and Tehran in Bürgenstock, Switzerland, were suddenly canceled.

Oil prices began to rise in the first hours after the cancellation of the meeting was announced. The international benchmark Brent rose to $80,33 a barrel, while the US WTI reached $77,85. Traders immediately reviewed the risks associated with a possible blockade of transit through the Strait of Hormuz, which remains a key route for oil supplies from the East.

Why did the negotiations break down?

The Swiss Foreign Ministry officially confirmed that the meeting in Bürgenstock will not take place. The White House added that Vice President J.D. Vance canceled the trip due to unresolved logistical issues. The day before, Vance stated that the Iranian side had not fired on ships in the strait for the second night in a row, fulfilling previous agreements. However, the lack of progress in the negotiations forced the parties to postpone the dialogue.

Analysts say the cancellation of the meeting does not mean a complete breakdown of the process, but signals deeper disagreements over security guarantees and economic concessions. The number of tankers that passed through the strait overnight was more than 12 million barrels, an important indicator for the market.

Market reaction and traders' expectations

After the initial drop, the quotes turned upwards. Brent increased by 0,6%, and WTI by 1,63%. Experts at Axi predict that prices will fluctuate in the range of 75–82 dollars per barrel in the near future. At the same time, they emphasize that the main shipping companies have not yet resumed regular sailings through the strait, and insurance rates remain high.

The market's caution is due to the fact that the physical resumption of transit is happening more slowly than political statements. Insurers are demanding additional guarantees, and shipowners are waiting for clearer signals from the Iranian side.

OPEC's position on future demand

OPEC Secretary General Haitham al-Ghais told CNBC in an exclusive interview that the organization sees no signs of a peak in global oil demand in the near future. He also dismissed the International Energy Agency's forecasts of a possible supply glut. Al-Ghais stressed that OPEC is based on actual figures, not hypothetical scenarios.

This position of the cartel contrasts with the estimates of Western analysts, who expect a slowdown in demand growth due to the development of electric vehicles and energy-efficient technologies. However, OPEC+ countries continue to adhere to a strategy of gradual increase in production, counting on stable demand in Asia and Africa.

Geopolitical context and risks for shipping

The Strait of Hormuz remains the most vulnerable point in global energy security. Even a temporary cessation of shelling has not completely eased tensions. Shipping companies are closely monitoring developments, and freight rates for tanker traffic from the Persian Gulf are still above pre-war levels.

Experts remind that any new escalation could lead to an instant price jump of $10-15 per barrel. Therefore, traders hold positions taking into account possible scenarios, and not just the current statements of the parties.

Impact on the global economy

Rising oil prices are already affecting fuel costs in Europe and Asia. Some airlines are revising their summer fares, and industrial enterprises in importing countries are planning higher energy costs in their budgets for the second half of the year.

At the same time, for exporting countries such as Saudi Arabia and the United Arab Emirates, higher prices mean additional revenues that can be used for social programs and economic diversification, creating an additional incentive to maintain market balance.

What's next: scenarios

Analysts believe the most likely scenario is for negotiations to resume in the coming weeks, possibly via video conference. At the same time, they do not rule out a prolonged pause if the parties fail to find a compromise on shipping safety guarantees.

In any case, the oil market will remain sensitive to any news from the region. Traders are already bracing for increased volatility in the coming days, and central banks are closely monitoring the impact of energy prices on inflation.