Oil Prices Soar, Iran Ceasefire Hopes Fade After Trump Speech
Oil prices rose sharply on Thursday (April 2nd) after US President Donald Trump's speech failed to provide clarity on when the Iran war would end. The market had previously expected Trump to announce a de-escalation plan, but his statement only increased uncertainty about the direction of the conflict.
Brent crude oil surged 7.5% to $108.81 per barrel, while WTI rose to $107.26 per barrel in early trading. This rise came after oil prices had fallen on Wednesday due to optimism that Trump's speech would pave the way for an end to the conflict.
In his speech, Trump stated that the US's "core strategic operations" were nearing completion, but asserted that the US military would hit Iran "very hard" in the next two to three weeks. He also said that gasoline prices would fall quickly and stock prices would rise quickly, without providing details of the steps or mechanisms to support these statements.
These statements led the market to assess that the risk of escalation remained high and the geopolitical risk premium widened again, especially as the war still had the potential to disrupt energy flows. As a result, expectations of a near-term decline in oil prices faded and price volatility increased again.
Iran responded hours after Trump's speech. Iran rejected the notion that its military capabilities were weakening, calling such assessments based on incomplete or erroneous information, according to a statement by the spokesman for Iran's joint military command, quoted by state media.
For the energy market, the combination of "no clear timeline" and the threat of intensified attacks were the main catalysts for the price surge, as investors reconsidered the scenario of longer-term supply disruptions. The focus will now be on developments in the military operation, Iran's response, and the stability of energy logistics routes, which will determine the direction of oil prices in the coming sessions.
Source: newsmaker.id
