Oil prices fell Thursday after President Donald Trump said he expects to sign a deal soon with Iran to end the war.
U.S. crude oil futures fell 3.9% to $86.51 per barrel in extended trading. Brent futures, the international benchmark, lost 4.2% to $89.15 per barrel.
U.S. oil closed at $87.71 per barrel, down more than 2%. Brent settled at $90.38, down nearly 3%.
Trump told reporters in the Oval Office that the U.S. had “made a great settlement of the war with Iran” that is “subject to finalization of documents. The president said he expects the U.S. and Iran to sign the deal in Europe after it is finalized in the next few days.
Earlier, Trump abruptly cancelled airstrikes against Iran that he planned for Thursday night, citing talks with the Islamic Republic. He has repeatedly sought to reassure the market that a deal is imminent only for tensions with Iran to escalate again.
Trump threatened earlier to take Iran’s Kharg Island, the country’s main oil export terminal, “at some point in the not too distant future.” The U.S. will seize “total control” of Iran’s oil and gas markets like Washington did in Venezuela, the president said in a Truth Social post.
Trump escalated military pressure on Iran this week as he has grown frustrated with Tehran for not agreeing to a deal to open the Strait of Hormuz and abandon its nuclear program. He accused the Islamic Republic of shooting down an Apache helicopter in Hormuz earlier this week.
The Middle East was on the verge of descending back into full-scale war earlier, after U.S. forces hit targets in Iran Wednesday and the Islamic Republic retaliated by launching missiles at several Gulf states.
Iran’s state-run Tasnim news agency said Tehran had struck several U.S. military facilities in Kuwait and Bahrain, including Ali Salem and Ahmad al-Jaber air bases in Kuwait and Sheikh Issa air base in Bahrain. Bahraini authorities said their air defense systems had intercepted and destroyed Iranian aerial threats.
Iranian state media said Tehran had carried out missile and drone attacks against U.S. vessels operating in the Strait of Hormuz. Kuwait shut its airspace and intercepted projectiles on Thursday, while Israel warned of launches from Lebanon toward communities in the country’s north.
Despite a fresh escalation in the U.S.-Iran conflict, Rystad Energy said Thursday that the oil market was better-positioned to absorb disruptions than in past crises, citing record U.S. crude exports, softer Chinese demand and alternative export routes that reduce reliance on the Strait of Hormuz.
The consultancy’s senior vice president Jorge Leon, however, warned that the chances of a near-term diplomatic breakthrough have diminished, leaving oil prices vulnerable to sharp swings as investors assess whether the latest hostilities will remain contained or evolve into a more prolonged conflict.
Source: cnbc.com
