[MARKET ANALYSIS] Crude firmer as strikes continue, but upside capped as Pakistan signals ongoing US-Iran talks

In US-Iran geopolitics, US CENTCOM announced that its forces successfully completed a heavy wave of strikes against Iran in response to the previous day’s attempted missile attacks on US forces. The strikes hit dozens of IRGC targets in Iran, including military command centres, missile and drone facilities, coastal surveillance and defence sites, and maritime capabilities. According to the WSJ, CENTCOM Commander Cooper proposed a two-week plan to escalate strikes in Iran. Arab sources reported that explosions were heard in Jordan, according to Nour News. It was later reported that Jordan intercepted five missiles launched by Iran and that there were no casualties, according to local media. Meanwhile, this morning, a Pakistani Foreign Ministry spokesperson said discussions between Tehran and Washington are ongoing regarding the situation in the Strait of Hormuz and de-escalation. Al Arabiya sources later suggested that no tangible results are yet seen in halting the escalation. On the flip side, Iran’s IRGC said it will “punish aggressors today” following recent attacks. 

Elsewhere, it is worth keeping the Russia-Ukraine conflict on the radar, as heavy explosions were reported in Ukraine’s capital, Kyiv, and in other areas, including Lviv, as Russia launched ballistic missiles. Poland also scrambled fighter jets amid Russian airstrikes on Ukraine. Polish PM Tusk said a missile fell inside Poland in an uninhabited area; it appears to be a Russian missile, but this is not 100% certain.

WTI Sep’26 and Brent Oct’26 futures are on a firmer footing as geopolitics escalate, but gains are capped by ongoing mediation and diplomacy efforts. WTI resides in a current USD 83.21-85.94/bbl range while Brent sits in a USD 86.70-89.50/bbl range at the time of writing, with both contracts towards the top end of the parameters. Dutch TTF meanwhile is softer and back under the EUR 60/MWh mark for the front-month contract, which found early support near EUR 59/MWh. No clear reason for the dichotomy between gas and oil, although a Qatari ship carrying LNG passed the Strait of Hormuz with Iran's permission.

Metals are mixed, choppy, and within recent ranges. Precious metals spiked on the FOMC yesterday before waning overnight as the Dollar recovered against the backdrop of escalating geopolitics. The yellow metal trades within a relatively narrow USD 4,028-4,100/oz range at the time of writing, within yesterday’s USD 3,996.05-4,116.42/oz. Spot silver resides in a USD 56.93-58.65/oz range at the time of writing, within yesterday’s 56.74-59.26/oz range. 

Base metals are on a firmer footing despite the firmer oil prices and escalating geopolitics, but possibly amid the Chinese Politburo meeting, which said the nation is to boost domestic demand and stabilise the property market. 3M LME copper trades towards the top end of a USD 13,636.00-13,752.83/t range at the time of writing.