The Iranian regime has mocked claims from Donald Trump that talks to end the war were progressing as markets struggle to digest a mixed bag of messages.
Tehran downplayed expectations of any immediate ceasefire, following emerging reports that the US had offered a 15-point ceasefire plan.
The President said the US was in “productive” talks with Iran and even went as far to declare victory in the Middle East.
“This war has been won,” Trump said during a speech at the White House, adding that Iran had been “wiped out militarily”.
Following news of the 15-point plan – as reported by the Wall Street Journal and Reuters – a spokesperson for the Iranian military hit back in a statement broadcast on Iranian-state television.
Lieutenant Colonel Ebrahim Zolfaghari said: “The one claiming to be a global superpower would have already gotten out of this mess if it could. Don’t dress up your defeat as an agreement. Your era of empty promises has come to an end.
“Have your internal conflicts reached the point where you are negotiating with yourselves?”
Despite the conflict messages, the price of oil fell over five per cent during early trading on Wednesday as markets hoped for some reprieve.
Brent crude – the international benchmark for oil – tumbled to below $96 a barrel.
Iran gives hope for oil flow
Military action has continued over the last 24 hours despite chatter of peace talks. Trump approved the deployment of an additional 1,000 troops to support the some 50,000 already in the region.
But there looked to be some hope in getting a small amount of traffic back through the all-important Strait of Hormuz, which around a fifth of the world’s oil supply flows through.
Iran said last night “non-hostile vessels” can pass through provided “they neither participate in nor support acts of aggression against Iran”.
Kathleen Brooks, research director at XTB, said this marked a “major development” for the oil market and “opens the door to oil flowing freely around the world once more”.
But she added it came with risk with little known details on what Iran would “consider as non-hostile”.
“For now, we think that the bias is to the downside for the oil price, however, it depends on the tone of the news flow,” Brooks said.
“With the long-term constraints to supply due to recent attacks on oil and gas facilities in the Gulf, the oil price is unlikely to fall below $90 per barrel for the longer term, regardless of the outcome of these negotiations.”
Traffic through the strait has all-but halted since conflict broke out over three weeks ago.
On Wednesday morning, a Thai oil tanker was confirmed to be on its way back to Thailand after successfully passing through the waterway.
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