Crude prices on Wednesday slipped for a third straight session as traders continued to take Iran’s word that it was making “diplomatic” efforts in the Middle East to end hostilities with the U.S. at face value.
Brent closed near $115 per barrel and West Texas Intermediate settled toward $102 per barrel on the strength of Iran's foreign minister, Abbas Araghchi, stating that Tehran continued to give diplomacy chance.
However, reports re-surfaced that Iran still demands that the U.S. lift its blockade of Iranian ports before peace talks can begin, meaning Washington should relinquish its most effective bargaining chip before talks can even resume over the Islamic republic’s nuclear program – which it has repeatedly refused to give up anyway.
Unsurprisingly, U.S. president Donald Trump rejected lifting the blockade and accused Iran of trying to string his country along until the midterm elections in November, which is widely expected to cost him control of the house and possibly the senate, thus theoretically stymying his ability to further prosecute the war.
Also, The Wall Street Journal reported that "the U.S. has told several Gulf Arab countries to be prepared for a short, intense military campaign after the U.S. midterm elections," citing people familiar with the matter.
Meanwhile, UBS raised its forecast for Brent crude prices, expecting it to trade at $110 per barrel by the end of 2026, up from its previous forecast of $100; the bank also raised its Brent forecast for March 2027 to $95 per barrel from $90, for June 2027 to $90 from $85, and for September 2027 to $85 from $80.
UBS said in a note, "Uncertainty around our forecasts remains elevated, reflecting the unpredictable nature of the Middle East conflict, and the pace of recovery in Gulf production and global oil demand."
