Alright, I'm getting straight to it because this weekend was absolute chaos. Saturday night Trump comes out and says the Iran deal is “basically done.” Everyone breathes easy. Then the very next day, Sunday morning, he's back: “Don't rush it…Time's on our side.”
WHAT WENT DOWN OVER THE WEEKEND
Quick recap. On Saturday Trump announces a deal with Iran is “mostly hammered out.” He even says he made calls from the Oval Office with half the Middle East. Saudi Arabia, UAE, Qatar, Pakistan, Turkey, Egypt, Jordan, Bahrain. Plus Netanyahu, of course.
What's in this deal? First, a memorandum of understanding as phase one. Then within 30 to 60 days, broader discussions. The biggest piece? Opening the Strait of Hormuz.
Just as everyone was waiting for the official announcement, Sunday rolls around. And Trump changes his tune. He posts that talks are going “constructively,” but tells his people to pump the brakes. “Both sides need to do this right. There's no room for mistakes,” he wrote. And he added one more thing. The naval blockade of Iranian ports stays in effect until a deal is actually signed.
What does that mean? Until ink hits paper, nothing's locked in.
You're probably thinking, “okay, if they're almost there, what's the holdup?
Honestly, plenty.
First and biggest. Enriched uranium. The US wants Iran to hand over its stockpiles and never get a nuclear weapon. Iran refuses. The Supreme Leader actually issued a rare public order. No enriched uranium leaves the country. An Iranian source told Reuters the nuclear issue wasn't even part of the preliminary deal.
Sticking point number two. The Strait of Hormuz itself. Trump talks about opening it. But Iran's Fars news agency says the Strait stays under Iranian control. They slammed Trump's announcement as “incomplete and disconnected from reality.”
And there's a third issue. Lebanon. According to Al Jazeera, the memo includes a ceasefire framework for Lebanon. But Israel isn't on board. They're pressing Washington to add language allowing military operations in Lebanon, justified by “any threat.” Iran rejects this and wants a permanent ceasefire. Netanyahu actually said Trump confirmed Israel's right to defend itself “on every front, including Lebanon.”
Rubio, who was in India, said progress was made over the last 48 hours and “good news” might be coming. But he was clear on one thing. Iran can never have a nuclear weapon.
WHY WALL STREET CARES
And this is where the markets come in. Oil. This war has hit the Strait of Hormuz, where roughly 20% of the world's oil and LNG flows through. When oil moves, almost everything moves with it. Inflation, interest rates, grocery prices.
So where are we now? Brent closed at $103.94 a barrel. US WTI at $96.60. But check this. Over the week Brent fell more than 5% and US oil more than 8%. Why? Because Trump said he called off planned strikes to let negotiations happen. Just the whiff of a deal is enough to knock prices down.
So where do we go from here? A Bloomberg survey of 126 market experts says most see Brent averaging between $81 and $100 over the next year. So basically a “ceiling” around $100. How does that happen? Something called demand destruction. Put simply, demand drops to offset the missing supply. Hardly a healthy setup.
On the flip side, there's a big “but.” The International Energy Agency warns that as we head into summer and travel demand picks up, the market could enter a “red zone” soon as global inventories drain. And MUFG goes even further. Oil might not get back to normal until 2027.
So yeah, prices fell on hopes of a deal. But as ING's analysts pointed out, this isn't the first time a deal looked close and then fell apart.