Sen. J.D. Vance says U.S.-Iran negotiations have made ‘a lot of progress’

U.S. Vice President J.D. Vance said on May 19 that Washington and Tehran had made “a lot of progress” in talks aimed at avoiding a renewed military campaign. Speaking at a White House briefing, Vance said neither side wanted to see fighting resume and said he believed Iran wanted an agreement. Oil markets reacted as traders weighed those comments against continued disruption in the Middle East. Brent crude futures were at $110.83 a barrel and U.S. West Texas Intermediate was at $103.88 early on May 20, according to Reuters, after both benchmarks fell nearly $1 on Tuesday following Vance’s remarks. (jpost.com) The comments landed in a wider diplomatic push that has unfolded alongside military threats and supply concerns around the Strait of Hormuz. Reuters reported that President Donald Trump said the war with Iran would end “very quickly,” while also warning that a new U.S. attack could come within days if no agreement was reached. (wtaq.com) ### What exactly did Vance say at the White House? J.D. Vance told reporters on May 19, “We think that we’ve made a lot of progress. We think the Iranians want to make a deal,” according to Reuters coverage of the briefing. He also said neither Washington nor Tehran wanted “to see a resumption of the military campaign.” (wtaq.com) Vance said he had just spoken with Trump and said the U.S. position remained that Iran could not be allowed to have a nuclear weapon. He said Washington wanted Iran to work with the United States on a process that would ensure Tehran could not rebuild nuclear weapons capacity in the years ahead. ### Why were traders watching his remarks so closely? (jpost.com) Brent crude fell 45 cents to $110.83 a barrel by 0050 GMT on May 20, while WTI fell 27 cents to $103.88, Reuters reported. The move followed a Tuesday drop of nearly $1 in both contracts after Vance said the talks had advanced. (jpost.com) Citi said on May 19 that it expected Brent to rise to $120 a barrel in the near term because markets were under-pricing the risk of a prolonged supply disruption and broader tail risks, Reuters reported. The bank’s call underscored how traders were still assigning a premium to the chance that diplomacy could fail. (wtaq.com) ### Where do these talks fit in the broader U.S.-Iran channel? Islamabad hosted at least a second round of U.S.-Iran talks in April, with Vance leading the American delegation after also heading the first round on April 11, according to Al Jazeera’s report citing Reuters photography and diplomatic reporting. (wtaq.com) The April talks were aimed at extending a two-week ceasefire, and the diplomatic track predated the outbreak of the U.S.-Israel war on Iran that began on February 28, the report said. Pakistan has been identified in outside reporting as a venue for the talks, though the latest May 19 White House remarks did not specify where the most recent contacts occurred. (aljazeera.com) ### What is still unresolved despite the progress claim? Donald Trump said on May 19 that Iran’s leaders were “begging for a deal,” but he also said the United States might need to strike Iran again and had been about an hour away from ordering an attack before postponing it, according to Reuters. (aljazeera.com) Toshitaka Tazawa of Fujitomi Securities said investors were trying to judge whether Washington and Tehran could “actually find common ground and reach a peace agreement,” while noting that the U.S. stance was shifting daily. He said oil prices were likely to remain elevated because of the possibility of renewed U.S. attacks and because supply would not quickly return to pre-war levels even if a deal were reached. (wtaq.com) ### What happens next that markets can measure? The International Energy Agency has said the conflict has effectively closed the Strait of Hormuz, a route that normally carries about a fifth of global oil supplies, according to Reuters. That has made every diplomatic signal part of the pricing story in crude. (wtaq.com) U.S. Energy Information Administration data is due later on May 20, and a Reuters poll expected crude stockpiles to have fallen by about 3.4 million barrels in the week to May 15. Traders will be watching that report alongside any further comments from Vance, Trump or Iranian officials on the next round of talks. (wtaq.com)