Oil prices plummet after Trump's predictions of war's end
Kyiv • UNN
The cost of Brent and WTI fell by 4% due to expectations of de-escalation of the conflict with Iran. Trump suggested easing sanctions against Russia to stabilize prices.
Oil prices fell on Tuesday after reaching a more than three-year high in the previous session, as US President Donald Trump predicted that the war in the Middle East could end soon, easing fears of prolonged disruptions to global oil supplies, UNN reports with reference to Reuters.
Details
Brent crude futures fell $4.17, or 4.2%, to $94.79 a barrel at 03:45 GMT (05:45 Kyiv time), while US West Texas Intermediate (WTI) crude fell $3.81, or 4%, to $90.96 a barrel. Both contracts fell as much as 11% before partially recovering losses.
On Monday, oil prices topped $100 a barrel, reaching their highest level since mid-2022, as supply cuts by Saudi Arabia and other producers during the expanding US-Israeli war with Iran fueled fears of major disruptions to global supplies.
Prices later fell after a phone call between Kremlin chief Vladimir Putin and Trump, during which proposals aimed at an early settlement of the war with Iran were discussed, a Kremlin aide said, easing fears of prolonged supply disruptions.
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In an interview with CBS News on Monday, Trump said he believed the war against Iran was "completely over" and that Washington was "significantly ahead" of its initial four-to-five-week projections.
"Clearly, Trump's comments about a short war calmed the markets. While there was an overreaction to the upside yesterday, we believe there is an overreaction to the downside today," said Suvro Sarkar, head of the energy sector group at DBS Bank, adding that the market is underestimating the risks of these levels for Brent crude.
"Murban and Dubai oil prices are still well above $100 a barrel, so virtually nothing has changed in terms of the real situation," he added, referring to the Middle East benchmark crude grades.
In response to Trump's statements, Iran's Islamic Revolutionary Guard Corps (IRGC) said it would "determine the end of the war" and Tehran would not allow the export of "a single liter of oil" from the region if US and Israeli attacks continued, state media reported on Tuesday, citing an IRGC official.
However, prices remain under pressure as Trump considers easing oil sanctions on Russia and releasing emergency oil reserves as part of a package of measures aimed at curbing soaring global oil prices, according to multiple sources.
Trump cancels sanctions against countries buying Russian oil10.03.26, 00:56 • 55306 views
"Discussions about easing sanctions on Russian oil, Donald Trump's comments hinting at a possible de-escalation of the conflict, and the possibility of G7 countries using strategic oil reserves — all pointed to the same thing: oil will continue to flow into the market one way or another," said Phillip Nova analyst Priyanka Sachdeva in a Tuesday note.
"Once traders realized that supply routes could still be maintained, the initial 'panic premium' that pushed prices above the $100 mark yesterday began to fade, and oil prices quickly declined," she noted.
On Monday, G7 countries said they were ready to take "necessary measures" in response to soaring global oil prices, but refrained from promising to unlock emergency reserves.
G7 not yet planning to use strategic oil reserves due to war in Iran09.03.26, 18:31 • 4940 views