Trump confirmed that the US and Iran held talks on Tuesday, urging Tehran to reach an agreement. Eamonn Sheridan, an analyst at InvestingLive, stated that Trump's comments (in the interview) indicate that de-escalation is unlikely in the short term, reinforcing the geopolitical risk premium already priced into crude oil and diesel prices following recent supply concerns related to the Strait of Hormuz. His revelation that Iranian energy infrastructure has not yet been attacked suggests that Washington still retains the option of a significant escalation. This factor may prompt traders to continue pricing in tail risks to regional oil supply. Meanwhile, the confirmation of talks with Tehran while continuing military action sends conflicting signals, suggesting that a path to negotiation may still exist even with continued military pressure. Given that energy infrastructure issues are directly related to actual supply, the market is likely to remain highly sensitive to any changes in wording regarding energy infrastructure.
