Oil prices fell to their lowest level in more than two weeks on Monday as fresh hopes emerged of a possible breakthrough in efforts to end the Iran war.
Brent crude, the international benchmark, dropped by more than 6.5 per cent to Ksh13,709 a barrel, its lowest level since October 16. The decline lifted airline shares and pushed down government borrowing costs.
The drop followed reports from Tehran that contacts between Iran and the United States aimed at ending their eight-month war were continuing.
“Consultations through mediators are very intensive. We have presented our conditions and proposals and everything depends on the political rationality of Washington,” Iranian Foreign Minister Abbas Araghchi said, according to state media outlet IRNA.
Over the weekend, Qatari officials attempted to negotiate the release of more than Ksh779.64 billion in Iranian assets, in a move that could pave the way for Tehran to allow the Strait of Hormuz to reopen.
US President Donald Trump had earlier adopted a tougher stance, telling voters in Iowa on Sunday that Iran would receive “the hammer” unless progress was made.
“The only reason why I’m not finished with Iran is I want to be nice. I want to try and save all those lives if I can … But at some point we’re going to have to give them the hammer,” he said during a campaign rally ahead of the US midterm elections.
Investors were also encouraged by reports on Monday that Iran’s Supreme Leader Mojtaba Khamenei had granted his government “powers” to negotiate with the United States in efforts to end the Middle East war.
Chris Beauchamp, chief market analyst at investment and trading platform IG, said: “The news is manna from heaven for stock markets, which have felt increasingly pressured by oil’s rise, but of course there is still a risk that Trump will try one last throw of the iron dice after the midterms.”
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