Oil prices tumble after Trump pauses Iran strikes for 10 days
Photo: Oil prices plunge after Trump's statements (Getty Images)
Oil prices posted their sharpest weekly drop in six months after US President Donald Trump said he would pause attacks on Iran’s energy sector for 10 days, Reuters reports.
Brent crude futures fell by 84 cents, or 0.8%, to $107.17 per barrel as of 03:53 GMT, while US West Texas Intermediate crude dropped by $1.02, or 1.1%, to $93.46 per barrel.
Both benchmarks were down 4.6% for the week, despite gains on Thursday — Brent rose 5.7% and WTI 4.6% — amid fears of further escalation of the war.
“Despite talks of de-escalation, oil is trading on war longevity, not just headlines. Any direct damage to oil infrastructure or prolonged conflict could force markets to rapidly reprice higher,” said Priyanka Sachdeva.
Experts say the war has removed 11 million barrels of oil per day from global supply, and the International Energy Agency describes the crisis as worse than the oil shocks of the 1970s combined with the Russia-Ukraine gas conflict.
Analysts at Macquarie Group said that if the war begins to ease soon, oil prices could fall quickly in the coming months, though they would still remain above pre-conflict levels. However, they warned prices could surge to $200 per barrel if the war drags on through the end of June.
“With each passing day, market pressure is building. Asian countries are tapping buffer stocks and weighing demand adjustments,” said Mukesh Sahdev, founder and CEO of Australia-based consultancy XAnalysts.
What preceded this
After the start of the US-Israeli operation against Iran, global oil prices surged sharply. This was due to Iranian forces blocking the Strait of Hormuz, through which Gulf countries supply oil to global markets.
These developments have allowed Russia to increase its energy export revenues. On March 24, Bloomberg reported that Russia’s oil revenues had returned to March 2022 levels.
According to the report, Moscow’s average daily revenue from crude exports in March doubled compared to the start of the year — from $135 million to $270 million.
