Brent crude drops to $87 as Trump signals end to Iran crisis
Global oil prices fell sharply on Friday, with Brent crude slipping to $87 per barrel after President Donald Trump signaled a possible end to the conflict with Iran, easing fears of a prolonged disruption to global energy supplies. West Texas Intermediate (WTI) crude also dropped to around $84.66 per barrel. While the price is still […]
Global oil prices fell sharply on Friday, with Brent crude slipping to $87 per barrel after President Donald Trump signaled a possible end to the conflict with Iran, easing fears of a prolonged disruption to global energy supplies.
West Texas Intermediate (WTI) crude also dropped to around $84.66 per barrel.
While the price is still far from $70-$72 price it was before the start of the war, analysts say only a total end to the crisis would bring back the crude to the pre-war prices of $72.
The decline came after Trump announced that he had cancelled planned military strikes against Iran and claimed that negotiations had reached an advanced stage, raising hopes that a broader agreement could soon be reached to de-escalate tensions in the Middle East.
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“We have essentially ended the war with Iran,” Trump said during remarks at the White House, adding that a formal agreement could be signed in the coming days.
The comments marked a dramatic shift from earlier rhetoric, when the U.S. president threatened further military action and even suggested taking control of Iran’s key oil export infrastructure, including Kharg Island, which handles the majority of the country’s crude exports.
Reports indicated that markets responded swiftly to the prospect of reduced geopolitical risk.
Oil prices, which had surged above $90 earlier in the week amid fears of supply disruptions and renewed attacks in the Gulf region, retreated as traders began pricing in a potential reopening of vital shipping routes, particularly the Strait of Hormuz.
The vital waterway, through which a significant portion of the world’s oil and liquefied natural gas supplies pass, has been at the centre of market concerns since hostilities intensified between the United States and Iran.
Any threat to traffic through the strait typically triggers sharp increases in energy prices.
Trump also hinged about the reopening of the Strait of Hormuz even though Iran is yet to confirm the deal.