Rubio Plays Down Imminent U.S.-Iran Deal

The U.S. will deal with Iran “another way” if it does not reach a good deal with the Islamic Republic, U.S. Secretary of State Marco Rubio said on Monday, playing down hopes that an agreement is imminent.

Following signals from Washington during the weekend that the U.S. and Iran could be nearing a framework agreement, oil prices plunged on Monday in Asian trade, with Brent Crude prices slipping below the $100 per barrel mark.

However, losses were being contained at about 3-4% in the morning in Europe as the market hopes for a deal but acknowledges the energy crisis.

Rubio said on Monday from India that an agreement with Iran is still a “work in progress,” tempering excessive optimism in markets.

“We have what I think is a pretty solid thing on the table in terms of their ability to open up the straits, get the straits open, enter into a very real, significant, time-limited negotiation on the nuclear matters, and hopefully we can pull it off,” Rubio said, as carried by ABC News.

Iran’s nuclear ambitions remain a major sticking point, while there isn’t any indication that Iran would open the Strait of Hormuz without the U.S. making concessions, including lifting the American blockade outside the Strait in the Gulf of Oman.

“We’ve been at this stage before, only for talks to break down. Therefore, the market will likely be more cautious about overreacting to these headlines,” Warren Patterson, Head of Commodities Strategy at ING, said in a note on Monday.

“There also appears to have been some tempering of optimism,” the strategist noted.

As of Monday morning, the Strait of Hormuz remains mostly closed to tanker traffic, with just three tankers – one supertanker and two LNG carriers – making it in the past few days through the chokepoint, which handled about 20% of daily global oil and LNG flows before the war.

By Tsvetana Paraskova for Oilprice.com

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