Memorial Day Hope. The Energy Report 05/23/2025

The Trump Administration has been working hard for peace, going the extra mile to try to achieve a ceasefire in the Russian Ukraine war quagmire. More importantly for the next big move in oil may be today’s talks in Rome between the US and Iran to get Iran to agree to stop enriching Uranium and end it’s Baltic missile program in return for the US ending sanctions and allowing Iran to be forgiven for their sponsoring of terror groups like Hamas and the Houthi rebels and rejoin the international banking community. In March 2012, the EU sanctioned Iranian financial institutions by disconnecting them from SWIFT, the financial messaging system. This severely hampered Iran’s ability to conduct international trade and money transfers.

The key figures in this crucial meeting are Iranian Foreign Minister Abbas Araqchi and Trump’s Middle East envoy Steve Witkoff. The importance of these discussions lies in preventing Israel from attacking Iran’s nuclear facilities. Israel has repeatedly warned that Iran is close to developing a nuclear weapon and will not allow it to happen. Reports earlier this week suggested that Israel is preparing for an attack, which may be a threat to prompt a deal or an indication that Israel will act if talks fail. So in other words, if the talks break down, it might not be a great idea to be short of petroleum over the weekend unless you have deep pockets and are prepared to double down. You can also position using my Daily Trade Levels or strategic spreads.

The expectations for these talks are not all that optimistic, despite both sides wanting to avoid a direct conflict. Earlier this year, Israel’s retaliatory strikes severely damaged Iran’s defenses, including their air defense systems. Due to sanctions, rebuilding them has been challenging. Ayatollah Ali Khamenei, Iran’s Supreme Leader,  said that the US demand that they give up their nuclear enrichment as “excessive and outrageous” and suggested that the talks are probably a waste of time and won’t come to anything, Iran’s negotiator foreign minister Abbas Araqchi, posted on X: “…Zero nuclear weapons = we Do have a deal. Zero enrichment = we do NOT have a deal. Time to decide”.

So positioning over the weekend will also be critical in these talks. If we end up with no deal and it appears that we are at a stalemate the risks of being short are very high. If they do get a deal then we’ll more than likely slip lower as it seems like the oil market is the only place in the world where there’s optimism that these talks will succeed or at least be extended to the point where it will hold the Israeli military from attacking Iran.

Of course we need to pray for the best outcome and hope that we can avoid a conflict and sadly there’s sometimes when conflict is needed against a rogue regime Iran. They are going to have to change their ambitions to get more in line with the world or they’re going to be left out isolated more and more from the world community. President Trump is working to push the Abraham accords and it’s the outliers like Iran that continues to be a stumbling block to peace in the region and the world.