(RTTNews) – Crude oil has plunged on Tuesday following comments from U.S. President Donald Trump that the ongoing U.S.-Israel versus Iran war would end “very soon.” The conflict has been driving oil prices to sky-high levels in recent days.
WTI Crude Oil for April delivery was last seen trading down by $9.47 (or 9.99%) at $85.30 per barrel.
Yesterday, oil was trading at around $94.01 per barrel after soaring above $100 a barrel for the first time since 2022 earlier in the day.
In the Middle East, the combined attack by U.S. and Israel on Iran that began on February 28 rages on, entering day number 11.
The war has resulted in a blockade of the Strait of Hormuz. This narrow seaway is a critical chokepoint through which oil and energy shipments from Arab nations to other countries transit.
Iran had threatened severe attacks on any vessel passing through the channel due to which oil and energy transportation halted almost completely.
While Trump demanded complete surrender of Iranian forces, Iran has vowed to fight back.
Oil prices travelled up-north in the past few days, leading to inflationary pressures.
Faced with storage challenges, several Arab countries paused their output production.
The United Arab Emirates reduced its oil output by about 500,000 to 800,000 barrels a day, Kuwait by around 500,000 barrels a day, and Iraq by around 2.9 million barrels a day.
Earlier reports indicated that the G7 member nations were coordinating with the International Energy Administration to release their respective surplus strategic reserves. However, the alliance announced that for now, they are monitoring the situation and would act decisively if and when required.
The prospect of G7 oil flowing into markets mildly weighed down on oil prices.
In an interview with reporter Weijia Jiang of CBS News yesterday, Trump stated that the U.S. war with Iran would end “very soon.” Trump also asserted that Iran has no navy, communications, or air force with their missiles scattering and drones being blown up all over.
Commenting that the U.S. is “very far ahead of schedule” in ending the war, Trump reaffirmed that Iran has nothing left in a “military sense”.
Though Iran’s Foreign Minister Abbas Araghchi stated that Iran would continue the fight as long as it is necessary, Trump’s comments brought back the momentum in stock markets yesterday and oil prices plunged today.
The U.S. dollar index was last seen trading at 98.83, down by 0.03 (or 0.03%) today.
Trump explicitly warned Iran of “death, fire, and fury” if it continues to block the Strait of Hormuz.
Iran issued a counter-threat, claiming it would not allow “one liter of oil” to leave the Middle East until the U.S.-Israel attacks cease.
Iran’s Islamic Revolutionary Guards Corps stressed that they would “determine the end of the war.”
Experts feel that the risk premium for oil would remain until the war ends completely though oil could see some correction in the near-term.
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