Key Moments
- ICE Brent settled up 2.1%, marking its first gain of the week amid fading prospects for renewed US-Iran negotiations.
- Oil shipments through the Strait of Hormuz have shown signs of gradually increasing, with assumed average flows of 5m b/d.
- Venezuela is weighing a departure from OPEC as relations with the US improve, potentially trimming OPEC’s formal sway while preserving broad OPEC+ influence.
Market Reaction to Geopolitics
ING analysts Warren Patterson and Ewa Manthey report that Brent oil prices have rebounded, with ICE Brent rising 2.1% as expectations for renewed talks between the US and Iran have diminished and crude flows through the Strait of Hormuz have been gradually increasing.
They note that “Oil prices ended higher for the first time this week yesterday, with ICE Brent settling up 2.1%. The renewed strength comes after reports that President Trump told mediators the US has no intention of returning to the terms of the June Memorandum of Understanding.”
According to the analysts, “Instead, he indicated, the US is happy to see whether growing economic pressure on Iran yields better results. Optimism grew through the week amid efforts to restart talks.”
Strait of Hormuz Flows in Focus
Despite diplomatic efforts stalling, Patterson and Manthey point to signs of additional crude moving through the Strait of Hormuz. They state: “Despite diplomatic efforts hitting a roadblock, there are growing signs of additional oil flowing through the Strait of Hormuz. We’ve been assuming oil flows through this key chokepoint have averaged 5m b/d.”
| Market Indicator | Detail |
|---|---|
| ICE Brent move | Settled up 2.1% |
| Strait of Hormuz assumed flows | 5m b/d |
OPEC Structure Under Pressure
The analysts also underscore growing structural risks for OPEC membership. “OPEC faces the risk of another member exiting the group after the UAE’s departure earlier this year. Venezuela is considering leaving the group as relations with the US improve following the ousting of Nicolas Maduro at the start of the year.”
They add that “While an exit would reduce OPEC’s influence over the oil market, the group still holds a large market share, particularly when you factor in OPEC+.”
Implications for OPEC and OPEC+
Patterson and Manthey highlight that Venezuela’s potential exit could weaken OPEC’s formal role but emphasize that the broader OPEC+ alliance would continue to exert significant influence over global oil markets due to its substantial collective market share.
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