Oil Prices Drop as Trump Reduces Likelihood of Escalation with Iran
Oil prices fell after Trump's comments on the lack of necessity to attack Iran, alongside rising OPEC production.
Translated by Qiyas from الجريدة — Original source
Oil prices fell today, continuing losses from the previous day, after U.S. President Donald Trump said that launching a military operation against Iran was not necessary “at this stage,” easing concerns about continued disruption of Middle East supply flows.
Brent crude dropped below $90 a barrel today for the first time since August 31, falling 5.9 percent at settlement.
Trump said on Monday that he intends to hold back and avoid launching new military attacks on Iran for now, following appeals from regional countries, including a plea from the prime minister of Qatar during talks at the White House.
In an interview with Reuters and in a subsequent appearance at the White House press briefing room, Trump said he plans to continue imposing a naval blockade in the Strait of Hormuz for the time being.
Tim Waterer, an analyst at KCM Trade, said: “The market continues to prioritize the more conciliatory tone adopted by President Trump toward Iran since the midterm elections.”
He added: “Despite ongoing attacks on ships in the Strait of Hormuz, they have not escalated to the point of imposing new risk premiums on the market.”
On the supply side, a Reuters poll showed that oil production in Organization of the Petroleum Exporting Countries (OPEC) member states rose in October, driven by increased output in Saudi Arabia, Kuwait, and Iraq, despite ongoing export restrictions.
Brent crude has fallen about 23 percent from its six-month peak of $118 a barrel recorded on October 30, as fears of Trump escalating attacks against Iran following the midterm elections have receded, though concerns about disruption to shipping flows remain.
Meanwhile, Russian and Ukrainian officials began two days of talks today, mediated by the United States, the first since February, after Trump said last week that a comprehensive peace agreement is possible in their war, which has lasted four and a half years, and that it could also include arrangements concerning European security.
On the demand side, China’s crude oil imports in October rose to their highest level since March, according to official data released today, after imports had dropped sharply due to supply disruptions from the Middle East caused by the U.S.-Israeli war against Iran.
