US President Donald Trump on May 6 cooled expectations for a near-term agreement to end hostilities with Iran, telling the New York Post it is “too early” to talk about a deal. The comments add a layer of uncertainty to a geopolitical situation that has kept oil markets on edge, with Brent crude futures holding above $80 a barrel.
"I think we'll go, but it's a little bit too far," Trump said, referring to a potential signing ceremony in Islamabad, Pakistan, which he described as a premature idea. "I want to get the deal done." The remarks stand in contrast to recent reports suggesting progress in negotiations, including a pause in US-led naval escorts for commercial ships in the Strait of Hormuz, a critical chokepoint for global energy supplies.
The president's cautious tone follows a period of heightened tensions and introduces fresh variables for investors. The initial reports of de-escalation had caused a slight easing in the geopolitical risk premium for crude oil. However, with the timeline for a deal now less certain, market participants may shift back into safe-haven assets. Gold, a traditional beneficiary of geopolitical instability, saw a modest uptick following the president's remarks.
The situation leaves the market looking for the next concrete development. Should talks formally stall, the risk premium in oil prices is likely to widen, potentially pushing Brent crude toward the $90 mark. Conversely, any surprise announcement of a formal summit or agreement could see prices pull back sharply. The last major flare-up in the region in 2019 saw oil prices spike more than 14 percent in a single day.
This article is for informational purposes only and does not constitute investment advice.
