[MARKET ANALYSIS] Crude on the backfoot despite rising tensions re. Iran

• A softer start to the week for crude benchmarks, under modest pressure of c. 0.50/bbl at most to lows of USD 58.64/bbl and USD 62.89/bbl for WTI and Brent, respectively.
• Benchmarks spent APAC trade chopping in relatively wide bands in excess of USD 1.00/bbl. The complex began APAC firmer, peaking at USD 59.80/bbl and USD 64.00/bbl. Upside driven by increased geopolitical tensions, particularly relating to Iran. However, despite the escalatory remarks from POTUS that Iran is beginning to cross the line, the benchmarks failed to sustain early gains.
• Thereafter, they came under modest but notable pressure and slipped into the red, as outlined above. Downside driven by known supply-side dynamics, and as Iran makes clear that communication lines with the US remain open, and they are still prepared to talk.

Crude prices are under pressure despite heightened tensions regarding Iran, suggesting that the market is balancing geopolitical risks against underlying supply dynamics. The initial gains from escalated rhetoric have faded as Iran signals a willingness to engage in dialogue, which could diminish fears of conflict and impact supply expectations. This situation indicates a complex interplay between immediate geopolitical concerns and the market's underlying fundamentals, likely leading to continued volatility in crude prices.