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U.S./IRAN TALKS IN SWITZERLAND COMMENCE
ISRAEL/LEBANON SHAKY CEASEFIRE
OTHER NOTABLE MARKET DEVELOPMENTS: Deep Russian refinery strike, Iraq tells five fields to lift output, Kharg Island loadings resumed, China's Russian imports hit an 8-year low, Three Indian VLCCs reemerged
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🇺🇸 🇮🇷 U.S./IRAN TALKS IN SWITZERLAND COMMENCE
Talks opened Sunday in Switzerland. VP JD Vance called early progress encouraging; Iranian state media claimed Tehran's delegation walked out, a claim Axios pushed back on amid conflicting reports.
Iranian negotiator Hussein Gurbanzadeh said the two sides discussed unfreezing Iranian assets and a near-final proposal for a temporary sanctions exemption on oil and its derivatives.
In a Sunday Fox News call, Trump said the U.S. "may take over the Strait" if no deal is reached and threatened to collect tolls, warning Iranian officials a closure would cost them "the country." He also posted that strikes on Iran would resume unless Tehran reins in Hezbollah. The toll threat follows a Saturday Truth Social post reiterating no tolls for the 60-day ceasefire window, with the U.S. reserving the right to impose them afterward as compensation for serving as the region's "Guardian Angel".
Hormuz: IRGC claims a Saturday closure; CENTCOM counted 55 transits that day, Kpler just 20. US Energy Sec. called traffic "back to normal". Windward shows transits dropping to 12 Sunday from 21+ Saturday, profile turning dark and Iranian-linked, meanwhile confidence built over the week is reversing fast.
Context: Little to take away in terms of progress early in the talks but a few things are clear: Iran is demanding Israel stops its Lebanon offensive, its pushing back against Trump threats and its already willing to use Homruz as leverage.
Even if Hormuz opens again, already nervous shipowners are going to have lost further confidence.
The U.S. has made numerous major concessions in the latest MoU and weekend developments highlight that Iran remains in control.
🛢 Oil Sentiment: Overall bullish on Hormuz closure. A lot of optimism priced into oil this week as the MoU was surprisingly announced last Sunday. A number of positive signs had emerged as far as Hormuz transits were concerned - encouraging higher Kuwaiti and Iraqi production commitments - but Iran’s feared tactic of using Hormuz status at will during the negotiations adds to oil risk sentiment and prices likely opening higher on Monday.
• The market remains on edge over any signs the talks are falling apart and potential Israeli strikes in Lebanon.
