US-Iran war: Oil prices climbed nearly 2% on Wednesday, April 1, after a record monthly gain, even as optimism grew that the ongoing US-Iran war may soon come to an end following recent remarks from US President Donald Trump.
Brent crude futures rose over 1.8% to $105.8 per barrel, after declining 3.2% on Tuesday. Meanwhile, WTI crude advanced nearly 1.7% to $103 per barrel on Wednesday.
Oil prices have remained above the key $100 level for most of March, supported by the shutdown of the Strait of Hormuz, a key chokepoint which accounts for a fifth of global crude oil passage.
Back home, crude oil prices on Multi Commodity Exchange (MCX) also witnessed a similar upward movement. MCX crude oil prices opened 1.34% higher at ₹9,697 per barrel on Wednesday.
What’s driving crude oil prices today?
Trump told reporters that the US could withdraw from Iran within two to three weeks, adding that while a deal with Tehran could be reached, it may not be essential to bring the conflict to an end.
He has repeatedly shifted his stance, at times suggesting an agreement with Iran is close, while also warning of an escalation in military action. The president is scheduled to address the nation at 9 p.m. Eastern time on Wednesday to share an update on the situation, according to White House Press Secretary Karoline Leavitt, as quoted by Bloomberg.
Even if the conflict ends within the indicated timeline, restoring normal movement through the vital Strait of Hormuz could take time, especially as some energy infrastructure has been damaged, which could keep oil prices higher. Meanwhile, a third US aircraft carrier strike group is en route to the Middle East, keeping markets cautious amid fears of a potential ground invasion of Iran by US forces.
The US President was quoted as saying by Bloomberg that the key military objectives had largely been achieved and that the US would withdraw once Tehran was no longer capable of acquiring nuclear weapons. He also claimed the current regime was an improvement over the previous leadership. In a social media post on Tuesday, Trump urged allies to take control of the Strait of Hormuz.
According to The Wall Street Journal, the United Arab Emirates has called on the US, along with European and Asian military powers, to form a coalition to forcibly reopen the strait, citing a UAE official.
Meanwhile, China and Pakistan jointly called for an immediate ceasefire on Tuesday and stressed the need to ensure safe passage for shipping through the Strait of Hormuz. The appeal was part of a five-point proposal aimed at restoring peace and stability in the Gulf and the broader Middle East, following talks between the two countries’ foreign ministers.
(This is a developing story)
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