Crude oil prices, which had surged relentlessly since the start of the US-Iran war, plunged sharply in Monday evening’s session, with both Brent and WTI crashing over 14% from the previous day’s close. Concerns about oil supply disruptions eased after US President Donald Trump said on 23 March that the US and Iran had held productive talks over the past two days.
Trump also said he was halting any strikes on Iranian power plants and energy infrastructure for five days.
“I am pleased to report that the United States of America and the country of Iran have had, over the last two days, very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East,” President Trump said in a social media post.
“Based on the tenor and tone of these in-depth, detailed, and constructive conversations, which will continue throughout the week, I have instructed the Department of War to postpone any and all military strikes against Iranian power plants and energy infrastructure for a five-day period, subject to the success of the ongoing meetings and discussions,” Trump said.
Trump’s statement came after Iran threatened to attack Israel’s power plants and those supplying US bases across the Gulf region if the US targets Iran’s power network. On Saturday, Trump warned that Iranian power plants would be destroyed if Tehran failed to “fully open” the Strait of Hormuz to all shipping within 48 hours.
The war has damaged major energy facilities in the Gulf and nearly halted shipping through the Strait of Hormuz, which handles about 20% of global oil and liquefied natural gas flows
Meanwhile, Iranian media reportedly claimed there had been no direct or indirect contact with President Trump.
Brent crude hits $96; WTI slips to $84
Brent crude futures slumped 14.43% from Friday’s close to hit an intraday low of $96 per barrel, breaking below the $100 mark for the first time since 11 March. However, prices are still up around 46% so far this month. Meanwhile, WTI crude futures also tanked 14.25% to reach an intraday low of $84.23 per barrel.
Crude oil has remained the focal point of the crisis, as the closure of the Strait of Hormuz by Iran and continued attacks on energy infrastructure by the US, Israel, and Iran have triggered force majeure declarations by several oil-producing nations in the Middle East, raising concerns that a prolonged conflict could deepen supply shortages.
Today’s sharp fall in crude oil prices marks a significant turning point, as earlier measures announced by Trump to boost market sentiment had failed to provide a lasting impact.
Earlier, the Trump administration lifted sanctions on Iranian and Russian crude. The IEA and the US have also moved to release millions of barrels of crude from strategic reserves, while Trump has reportedly waived Jones Act shipping rules for 60 days to stabilise the oil market.
The US has been trying to reopen the Strait of Hormuz, the narrow mouth of the Persian Gulf, for energy shipments. Iran had shut the strait — through which nearly a fifth of the world’s oil is shipped, along with other key commodities — in response to US and Israeli strikes.
Last week, Saudi Arabia forecast that oil prices could hit $180 if the war drags on beyond April. Earlier, Qatar’s Energy Minister warned that Brent could reach $150.
(With inputs from Reuters)
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