“Unwarranted Optimism”: Freedom Cites 4 Reasons to Doubt the U.S.-Iran Deal
Brent crude fell 2% in trading on June 16
Uncertainty in the oil market persists despite the announcement of a peace deal / Photo: Unsplash/Zetong Li
Analysts at Freedom Broker did not share the optimism of investors and traders regarding the announced peace deal between the U.S. and Iran, calling it “unfounded.” Uncertainty in the oil market persists, as do significant disagreements between the parties, they note.
Four reasons to be skeptical
The text of the U.S.-Iran memorandum has not been released, and the document itself may not be signed until Friday, June 19, according to a note from Freedom Broker obtained by Oninvest.
The document that may be signed is not a final agreement, but merely a framework for further negotiations, which will take another 60 days.
The parties’ positions on key issues—Iran’s nuclear program, shipping in the Strait of Hormuz, and Iran’s support for foreign groups such as Hezbollah and Hamas—remain significantly at odds. This will make it difficult to reach a final agreement, according to Freedom Broker.
Tehran’s demands, as reported by Iranian media, such as the withdrawal of U.S. troops from areas bordering Iran or a plan for the U.S. and its allies to provide at least $300 billion in aid to Iran, “seem absurd,” according to Freedom.
In addition, according to analysts, Israel’s stance could pose an obstacle: it is unlikely to agree to acknowledge Iran’s de facto control over Lebanon through Hezbollah.
“Optimism regarding the agreement between the U.S. and Iran appears unfounded,” according to a Freedom memo.
Given this, uncertainty in the oil market persists, analysts note. Developments surrounding the Strait of Hormuz will remain the key factor influencing prices. A return to hostilities could push U.S. WTI futures above $110 per barrel, while de-escalation could trigger a sharp correction. If the “double blockade” of the strait by the U.S. and Iran persists, a gradual rise in prices can be expected, Freedom warned.
Context
On June 15, U.S. President Donald Trump stated that the United States and Iran had already signed the documents, and that the Strait of Hormuz—through which 20% of the world’s oil and gas supplies passed prior to the war— “is already partially open” and will be “fully open” on Friday. An official ceremony is expected on June 19 in Geneva.
Oil prices fell to their lowest level since March, driven by traders’ optimism regarding the deal. During trading on June 16, Brent crude fell 2.3%, dropping to $81.2 per barrel. WTI futures fell to $78.5 per barrel.
This article was AI-translated and verified by a human editor
