The explosion at Iran's port early in the morning cast a shadow over the prospects of US-Iran negotiations.

The explosion at Iran's port early in the morning cast a shadow over the prospects of US-Iran negotiations.

Oil prices closed with long lower shadows for the second consecutive day, continuing to fluctuate sharply within the day, with a range of up to $8 between highs and lows. During Thursday's Asian-European trading hours, following WTI, Brent also easily fell below the $100 mark, hitting a new low at one point. This behavior in crude oil is due to investors betting on the development of the oil market, believing that hopes for a peace agreement between the US and Iran are rising, and that the tight supply situation will ease. However, this expectation quickly faded after clashes between the US and Iran again occurred in the early hours of Friday.

Although the US emphasized that the military strikes on Iran's Gasham Port and Abadan Port were not a resumption of war or the termination of a ceasefire agreement, the market clearly does not see it that way.

The overall message is that the US military struck Iranian oil tankers, and then, during the US Navy missile destroyer's passage through the Strait of Hormuz en route to the Gulf of Oman, Iran retaliated, leading the US military to conduct self-defense strikes against Iran. Multiple Iranian ports were attacked. The US Central Command emphasized that it has no intention to escalate the situation but has deployed forces and is ready to protect US troops at any time. According to reports, Iran's Supreme Joint Military Command stated that the US, with the cooperation of some regional countries, carried out airstrikes on civilian areas. Iran will respond strongly to any attack without hesitation. A spokesperson from Iran's Hatem Ambyar Central Command issued a statement saying that US forces violated the ceasefire. Some Iranian media reports suggest that the UAE may be involved in the explosion on Gasham Island.

There are signs that the UAE has taken hostile actions at the port of Bakhman on Gasham Island. "If true, the UAE will pay the price for its hostile actions." Previously, the market generally expected Iran to submit a response to the mediator on Thursday regarding the US's proposal to end the war, but as of early this morning, Iran had not issued an official response. Some Iranian officials stated that no uranium had been transferred out of Iran, and Iran would not allow the US to reopen the Strait of Hormuz based on an "unrealistic plan" and then withdraw from the war without paying any compensation for all damages caused to Iran. For negotiations between Iran and the US to reach a satisfactory result, they must include "substantive interests," not the kind of "superficial posture" the US attempts to offer. Even if the US withdraws from the region, Iran will still demand its rights and war reparations. "We have endured them for 47 years and will continue to resist." Additionally, Iran has strengthened control over the Strait of Hormuz, introducing new regulations requiring ships to declare their passage to the "Persian Gulf Strait Authority" before transit. Aziz, chairman of Iran's National Security Committee, posted on social media that repeating past mistakes will lead to a stronger response, and urged respect for Iran's new maritime jurisdiction system. The above statements from Iran indicate that reaching an agreement in the current situation remains very difficult, far from the optimism expressed by Trump on Wednesday about reaching a framework agreement with Iran, and both sides, especially the US, need to make significant compromises. Yesterday, Trump believed that a framework agreement could be reached within a week, which coincides with his trip to the East in a week.

It now appears that with the resurgence of US-Iran military conflict, the situation is very complicated. The rebound of over $8 from the intraday lows already says it all. The US-Iran negotiations face a major setback again, and attacks on Iran make it even harder for Iran's military, which already distrusts the US, to cooperate in negotiations. The efforts to reach an agreement that were closest to success may once again fall apart, increasing geopolitical risks and making the oil market situation more complex. This further heightens market uncertainty, and the pattern of wide-range fluctuations at high prices will continue, emphasizing the need for increased risk management.