Rabobank strategist Michael Every notes Oil prices are currently lower on hopes for de-escalation in multiple conflicts, including developments around Saudi infrastructure, Iran talks and Ukraine. However, Every stresses that hardened positions in Iran, Russia and broader security shifts mean energy prices could still change dramatically depending on how major geopolitical deals and confrontations evolve.

Conflicts and deals steer Oil prices

“Oil is down on hopes for ‘peace in our time.’ The Saudi east-west pipeline will start again at lower capacity, China warned the Houthis not to block the Red Sea, Trump negotiators held a “very productive” three-hour meeting with the Iranians in New York, Iran floated reopening Hormuz in seven days if the US lifts its blockade, and Ukraine’s Zelenskyy stated Kyiv and Washington want that other war to end “before winter” and is ready for an “energy ceasefire.””

“Yet elsewhere the question looks like ‘war at what time?’ Iran has hardened its demands for ending the war, and Trump just publicly threatened it with “annihilation”, then met with the Arab states expected to attack Tehran alongside it if that were to occur.”

“In Russia, two more oil refineries were just hit, and bomb shelters in Moscow and St Petersburg are quietly being modernised.”

“If certain deals are struck, if certain countries are struck, if certain market flows are struck, energy prices can change dramatically – and then, suddenly, central bankers will be saying very different things.”

“Those who listen only to them will think they are ahead of the curve rather than seeing they are behind the geopolitical and geoeconomic ones.”