Trump Prepares Strike Decision, Oil Prices Slip
Oil prices plunged after President Donald Trump signaled a decision on whether to attack Iran would be made within two weeks, easing concerns about an imminent U.S. strike.
Brent plunged as much as 2.7% to trade below $77 a barrel, before recovering some of the losses. White House spokeswoman Karoline Leavitt said the decision would take time because there was “a strong chance of negotiations” with Iran, according to a dictated message from Trump. She declined to elaborate on the timetable, including how she viewed the chances of success of any talks.
It has been a tumultuous week for the oil market, with futures fluctuating around $8, volatility rising, time frames widening significantly and options at one stage more bullish than they were after Russia’s invasion of Ukraine.
Brent closed nearly 3% higher on Thursday amid concerns about a potential U.S. strike over the weekend. Senior U.S. officials have been preparing for a possible strike, although the situation is still evolving, according to people familiar with the matter.
“Leavitt’s comments have taken some of the urgency out of the market,” said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp. “At least for now, we’re set to remain very well supported in this very volatile $70-$80 range.”
Israel continues to attack Iran’s nuclear sites, but for now the country’s crude-exporting infrastructure remains unscathed. There are signs, however, that the OPEC producer is racing to get its oil out to the world, as storage tanks at the key Kharg Island terminal are filling up with crude.
The biggest concern for oil markets centers on the Strait of Hormuz, but so far there are no signs that Tehran is trying to disrupt shipping through the narrow waterway at the entrance to the Persian Gulf. About a fifth of the world’s crude output passes through the strait. Read More: Oil Could Jump to $90 If Strait of Hormuz Is Closed, Citigroup Says
Trump will attend a National Security meeting on Friday morning, according to the daily schedule released by the White House. Iran must not get a nuclear weapon, U.S. Secretary of State Marco Rubio said in a post on X after meeting with British Foreign Secretary David Lammy to discuss the conflict.
Brent for August delivery fell 2.1% to $77.21 a barrel as of 1:01 p.m. in Singapore.
Futures were still on track for a third weekly gain.
WTI for August delivery rose to $73.96 a barrel from Wednesday’s settlement, after no settlement was made on Thursday because of a U.S. holiday.
The front-month July contract, which expires Friday, rose to $75.67.
Source: Bloomberg
