Trump Reportedly Conditionally Eases Iran Sanctions; WTI Crude Reverses Gains to Hit Low of $91, Dow Narrows Losses

TradingKey - On September 28 ET, according to Al Jazeera, the United States is willing to consider easing sanctions on Iran and unfreezing frozen assets provided that "concrete progress" is made on the Iranian nuclear issue. U.S. officials said the U.S. and Iran are engaging in active discussions through intermediaries, but no agreement will be reached if the nuclear issue cannot be resolved.

Influenced by news of easing U.S.-Iran negotiations, WTI crude turned from gains to drop 1%, reaching a low of $91.31; Brent crude fell to a low of $103.80.

At the same time, U.S. stock indices also recovered part of their early losses. As of press time, the Dow Jones Industrial Average was down 0.18% at 51,735.49 points, narrowing from a morning drop of over 400 points to currently down just 100 points; the Nasdaq Composite Index fell 0.46% to 26,944.54 points; and the S&P 500 Index dropped 0.37% to 7,715.07 points.

The combination of the two market movements indicates that although the market has expectations for U.S.-Iran negotiations, unilateral optimism has not yet formed, and investors are still evaluating whether the talks can truly translate into executable policy arrangements.

For oil prices, this news brings a dual impact. On the one hand, continued negotiations further reduce the likelihood of a further escalation in the Middle East situation, thereby suppressing part of the geopolitical risk premium previously priced into crude oil. On the other hand, if sanctions loosen in the future, conditions for Iranian crude oil exports, shipping insurance, and financial settlements could all improve, leading the market to trade in advance on expectations of potential supply increases.

However, an easing of sanctions does not mean Iranian crude oil will immediately flood back into the market in large volumes. The actual increase in supply still depends on whether the nuclear agreement can be finalized, when both parties execute their commitments, and whether relevant financial and transportation arrangements can be restored. Therefore, WTI giving up its intraday gains is more like the market repricing negotiation expectations rather than the supply shock having completely disappeared.

Currently, U.S.-Iran negotiations remain in the expectation-trading phase. U.S. officials stated that although Iran has shown a degree of flexibility, the two sides have not yet reached an agreement on the execution timeline for their commitments. Trump rejected Iran's proposal to reopen the Strait of Hormuz first and remains skeptical of Iran's plan. Iran was previously accused of violating the memorandum of understanding reached by both sides in July and attacking commercial vessels, which has also heightened U.S. concerns over the credibility of its commitments.

Going forward, the market needs to closely monitor three key things: whether the U.S. and Iran will continue substantive talks this week; whether both sides can present a verifiable and executable timeline for the nuclear issue; and whether the U.S. actually initiates sanctions easing and asset unfreezing procedures.

If the negotiations achieve concrete progress, crude oil may still face dual pressure from supply expectations and a pullback in risk premiums; if the negotiations stall, or if risks surrounding the Strait of Hormuz and commercial shipping heat up again, the geopolitical premium on oil prices could return rapidly.