Oil Prices Decline as Trump Eases Tensions with Iran

Oil Prices Decline as Trump Eases Tensions with Iran

Oil prices fell on Monday following remarks from U.S. President Donald Trump, who expressed hope for a deal with Iran, alleviating fears of escalating conflict between the two nations in a region known for its significant oil production.

West Texas Intermediate crude dropped by 3.4 percent to $62.99 a barrel, while Brent crude saw a 3.2 percent decrease, settling at $67.09 during early trading in the Asian market, immediately after the President’s statements.

In recent weeks, Trump had suggested the possibility of military action against Tehran due to the suppression campaign in Iran that resulted in thousands of deaths. The United States had also reinforced its military presence in the Middle East by deploying the aircraft carrier Abraham Lincoln to the region. However, the President has repeatedly returned to the option of negotiating to avoid military confrontation.

Trump stated in an interview with reporters on Sunday, “We hope to reach an agreement, and if that doesn’t happen, we will see who was right,” referencing the Supreme Leader of the Islamic Republic, Ayatollah Ali Khamenei.

For his part, Khamenei issued a stern warning in his first appearance in two weeks, asserting that any war initiated by the United States would become a “regional war.”

Previously, Washington had conducted strikes in June targeting key Iranian nuclear sites amid a 12-day military escalation between Israel and Iran, in which the United States was involved for a short period.

Oil prices had notably increased earlier last week amid fears of direct American intervention in Iran, potentially affecting oil production and supply, especially in the Strait of Hormuz, through which about 20 percent of global crude oil passes.

Brent crude for March delivery hit $70.71 per barrel at the close of trading last Thursday, the highest level since July, while West Texas Intermediate crude surpassed the $65 mark.