Oil prices drop significantly as Trump downplays possibility of another attack on Iran

After U.S. President Trump downplayed the possibility of launching a new round of large-scale military strikes against Iran, international crude oil futures prices fell significantly in early trading on November 9. The decline once exceeded 5%, and then narrowed.

As of 11 a.m. EST on the 9th, the price of light crude oil futures for December delivery on the New York Mercantile Exchange fell to as low as $86.19 per barrel, down $4.64, or 5.11%; the price of London Brent crude oil futures for January delivery fell to as low as $92.80 per barrel, down $5.52, or 5.61%.

In a telephone interview with CNN on the 8th, Trump said that as long as the US-Iran negotiations make progress, it is “extremely unlikely” that the United States will resume large-scale military operations against Iran. However, he also emphasized that the US military in the Middle East is “ready” and did not rule out the possibility of using force again.

Ole Hansen, head of global commodity strategy at Denmark’s Saxo Bank, said that the market’s expectations for a peace agreement between the United States and Iran have driven oil prices to continue to fall, and Trump’s relevant statements have further increased downward pressure on oil prices.

The EBW Group, a US energy market analysis agency, stated in a report that it is skeptical about whether the US-Iran negotiations can be fruitful, but if crude oil exports from the Middle East remain strong, the United States may have no more reason to restart military operations.

UBS analyst Giovanni Staunovo believes that crude oil shipments in the Middle East are still at high levels and the weak performance of the spot market is one of the factors putting pressure on oil prices.