Brent crude dropped below 83 US dollars a barrel on Monday, a fall of nearly 6%, after Donald Trump said he had called off strikes on Iran. At one point it touched about 81.50 dollars, its lowest level in three weeks, the Independent reported.
Trump wrote in a social media post on Saturday evening that Middle East allies had reached the “perimeters” of a deal to end the five-month war. He said the emerging agreement would reopen the Strait of Hormuz and address US worries over Iran’s nuclear programme. Fox Business quoted him saying it would “include the Immediate, Complete and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat.” Fox reported that he indicated talks would start Monday afternoon.
Here’s what it means in plain terms: traders are betting the Strait could reopen. Before the war, about a fifth of the world’s oil and gas moved through that channel. Iran has repeatedly attacked ships that tried to use it without its authorisation, and the fighting effectively shut most transit routes.
Numbers moved, and then diverged
The two outlets gave different readings for Monday. Fox Business put West Texas Intermediate, the key US benchmark, down about 6.2% in the morning, near $79.45 a barrel after a drop of about $5. It had Brent down more than 3.5% at around $79.30.
Tehran pushed back on the idea that talks were coming. A spokesman for Iran’s foreign ministry told Reuters that no negotiations with the US were taking place or scheduled. The only discussions under way, he said, were with Oman over management of the Strait.
A volatile few weeks
Oil has swung hard. It rose on renewed tension in the war between the US, Israel and Iran, then slid as leaders hinted at peace talks. Late last month Brent briefly climbed back above 100 US dollars after fresh attacks in the Red Sea. Earlier this year prices went over $110 a barrel as tanker traffic collapsed under the threat of Iranian missiles, drones and mines. Before the conflict, crude traded in a $60 to $70 range.
At the pump, US drivers have felt it. The national average for a gallon of regular gasoline stood at $4.095 on Monday, up 7% on a month earlier and 30% on a year earlier.
Trump also turned on the industry. In a Truth Social post he said Chevron chief executive Mike Wirth had listed the reasons his company is doing well in a Fox Business interview, but left out the role of the administration. He urged oil companies to “get your consumer (retail!) Oil Prices DOWN, NOW!”
The White House has accused gas stations of padding margins. Groups for smaller stations and energy marketers dispute that. They say retail prices follow oil but typically take several weeks to fall, because stations must first sell through higher-cost inventory.
Sources
- Oil prices drop after Trump cancels strikes on Iran amid peace talks
- Oil slides as Trump delays Iran strikes, signals peace talks
