3 days ago
Michael Raceand
Peter Hoskins,Business reporters
Hindustan Times via Getty Images
The conflict in the Middle East has pushed up the cost of energy around the world.
Oil prices have dropped following a report the US and Iran have reached a deal, subject to President Donald Trump’s approval.
Axios reported officials had made an agreement over an extended ceasefire on Thursday. It drove the price of a barrel of Brent crude down to a low of $93.36 from a earlier high of $98, before rebounding to about $94.
Prices had jumped earlier after the US carried out new attacks on Iran, targeting a military site in Bandar Abbas, a strategic port city.
The strikes occurred despite an ongoing ceasefire between Tehran and Washington to allow for talks to end the three-month-long war that has effectively closed the Strait of Hormuz waterway, pushing up global energy costs.
Around a fifth of the world’s oil and liquefied natural gas (LNG) supplies usually pass through the strait.
Shortly after the US and Israel launched airstrikes on Iran on 28 February, Tehran responded by threatening to attack vessels using the shipping route.
Global energy prices have swung wildly since the conflict began, with Brent crude – the global oil benchmark – briefly surging to around $120 a barrel. Before the war it was trading at closer to $70.
The cost of oil had fallen sharply this week on hopes that a deal would soon be reached to reopen the Strait of Hormuz.
On Thursday afternoon, US media outlet Axios reported Iran and the US had reached an agreement for a 60-day ceasefire extension and the start of talks on Tehran’s nuclear program.
The agreement requires final approval from Trump, who has told negotiators that he wanted a few days to make the final decision, Axios reported.
The latest strikes mark the second time in three days that the US has attacked targets in Iran, with Washington saying they were conducted in self defence.
The US Central Command (Centcom) said its forces also shot down four Iranian drones “that posed a threat around the Strait of Hormuz”.
Centcom confirmed strikes on southern Iran earlier this week, in which it targeted Iranian missile sites and boats attempting to lay mines in the strait.
It said those strikes were designed “to protect our troops from threats posed by Iranian forces”.
Iran called the new attacks “a grave violation of the ceasefire” and said it “will not leave any act of hostility unanswered.”
Kuwait’s military said on Thursday that it was intercepting “hostile missile and drone threats” without providing further details.
