Oil Prices Drop After Trump Rules Out New Attacks on Iran - Sarmad
Global oil prices fell following Trump's statements regarding the unlikelihood of new attacks on Iran, amid geopolitical concerns and expectations of a supply surplus.
Translated by Qiyas from سرمد — Original source
Oil prices fell at the start of Monday’s trading after U.S. President Donald Trump stated it was unlikely he would order new attacks on Iran amid progress in talks aimed at ending the conflict, despite both countries reporting attacks on ships in or near the Strait of Hormuz.
By 0138 GMT, Brent crude fell 84 cents, or 0.85 percent, to $97.48 a barrel. West Texas Intermediate crude dropped 32 cents, or 0.35 percent, to $90.51 a barrel.
The decline reversed slight gains recorded at Friday’s settlement, as markets assessed the likelihood of further U.S. strikes on Iran. This comes despite Brent crude falling 17 percent last week, marking the largest weekly drop since the start of the COVID-19 pandemic and the largest in absolute terms, according to data from the London Stock Exchange Group dating back to 1988.
Trump told CNN in a phone interview, “It depends on whether they sign a very strong deal or not. And the answer is that it is very unlikely that it will be necessary.”
Trump had hinted at new attacks on Iran following last week’s U.S. midterm elections, but no signs of a large-scale U.S. military operation emerged. Iran announced it would retaliate by striking U.S. and Israeli targets.
Tim Waterer, chief analyst at KCM, described Trump’s remarks as “more moderate,” but added that “the market is still waiting to see whether the midterms have caused a permanent shift in Trump’s approach to the conflict, or if this is just another temporary change in tone.”
In a report issued on Friday, JPMorgan Chase stated that oil is heading toward another surplus. The recovery of oil flows from the Middle East, increased production from other countries, and weak demand have pushed global supply above consumption levels. The bank estimated the surplus at around 1.1 million barrels per day in September, rising to 1.4 million barrels per day in October.
Iraqi Foreign Minister Fawzi Hussein said in an interview with Al Jazeera on Sunday that his country had reached understandings with the United States to allow Iraqi oil exports to pass through the Strait of Hormuz via a shipping corridor near the Sultanate of Oman.
He added that Iraq’s losses from the Iran-Iraq War and disruptions to oil exports amounted to $60 billion.
Meanwhile, the Houthis claimed responsibility for an attack on Saudi Aramco offices in the capital Riyadh on Sunday, which shattered windows but caused no injuries.
