Crude oil slides as Trump signals Iran war may end soon

Crude oil prices fell more than 10 percent in post-settlement trade on Monday, slipping toward the US$ 80 per barrel mark after U.S. President Donald Trump indicated that the war with Iran could end soon. Energy markets were further pressured after the Group of Seven (G7) nations signalled plans to release crude oil from their strategic reserves to help cool prices amid the recent supply shock.

In early Asian trade on Tuesday, Brent crude hovered around US$ 92.45 a barrel, sharply lower than the intra-day peak of US$ 119.50 touched earlier and 6.6 percent lower than the previous day’s closing. Similarly, West Texas Intermediate (WTI) futures slipped below US$ 88.65 a barrel in pre-opening trade, 6.5 percent lower than the previous day’s settlement level.

Despite the later decline, oil prices had settled sharply higher on Monday. Benchmark Brent crude futures for May delivery jumped 6.8 percent, or US$ 6.27 a barrel, to close at US$ 98.96 a barrel, up from US$ 92.69 a barrel in the previous session. West Texas Intermediate (WTI) futures rose 4.3 percent, or US$ 3.87 a barrel, to settle at US$ 94.77 a barrel compared with US$ 90.90 a barrel earlier. For the week, Brent crude surged 27.9 percent, or US$ 20.21 a barrel, while WTI climbed about 36 percent amid escalating geopolitical tensions in the Middle East.

Speaking to reporters in Doral, Florida, on Monday, U.S. President Donald Trump said he expects the war with Iran to end “very soon”. He noted that the U.S. and Israel had struck more than 5,000 targets since the conflict began on February 28 following the killing of Iranian Supreme Leader Ayatollah Ali Khamenei.

Reports also suggested that Trump held discussions with Russian President Vladimir Putin on the possibility of a “quick settlement” to the conflict. The Republican leader is also reportedly considering a potential U.S. takeover of the Strait of Hormuz, a critical global oil transit route.

Analysts note that Iran’s new Supreme Leader, Ayatollah Mojtaba Khamenei—son of the late Ayatollah Ali Khamenei—continues to enjoy strong backing from the country’s hardline establishment.

Meanwhile, finance ministers from the G7 countries held an emergency meeting on Monday and agreed to release around 300 million barrels of oil from emergency stockpiles in coordination with the International Energy Agency (IEA). The move aims to ease the sharp surge in global energy prices in recent days.

Even speculation about such coordinated action was enough to cool the rally slightly, although prices remain significantly higher than pre-conflict levels.

DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com