Yesterday US President Donald Trump announced that the ongoing conflict between America and Iran appears to be easing. The pronouncement reduced fears of an escalation in the conflict between the two countries, instantly reversing an initial oil spike.
US crude dipped 4% the moment Trump announced a possible end to the conflict between the two nations.
In his speech, the president said: “Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world.”
Trump’s remarks briefly tumbled crude below $60, taking away all the gains it had made last week following a drone strike that killed Iranian general Qasem Soleimani.
After the Tuesday lobbed attack on bases that house US troops in Iraq, crude jumped to a dramatic high of $65.65. But in a seemingly unusual response to the strike, the US vowed to impose new sanctions to Iran instead of military retaliation.
There were fears that Iran’s response to last Friday’s attack would be among the worst in history. But with no life lost, sources close to the Whitehouse think that Iran might have intentionally targeted places with no American lives perhaps to reduce the impact of their revenge.
Iran is said to have launched more than a dozen missiles to US bases in Iraq, but no casualties were reported.
But the director of commodity research at ClipperData Matt Smith said that the “attack comes as no surprise that there has been a reprisal from Iran. The concern is that this is just a sign of things to come”.
The market has been actively looking out for any signs of an increase in conflict between the two nations and how that could threaten oil supply from the Middle East countries such as Saudi Arabia.
The United Arab Emirates energy minister yesterday reiterated that OPEC was ready to act if peace fails to prevail in oil-rich countries to prevent oil costs from rising.
In an interview with CNN Business, Suhail Al Mazrouei said that the group would guarantee an ample supply of energy to the world.
“We will always make sure that we supply the world with whatever it requires, “ Mazrouei said, adding that UAE was working on building additional storage units to curb the commodity’s shortages.