Oil prices dropped sharply on Thursday following comments from United States President Donald Trump suggesting that a diplomatic breakthrough with Iran could be imminent.
The decline came after heightened tensions between Washington and Tehran had pushed markets into uncertainty, with investors concerned that continued military exchanges could trigger a wider conflict in the Middle East and threaten global energy supplies.
According to reports, crude prices swung during Thursday’s trading session after the US and Iran exchanged fire for a second consecutive day and Trump earlier warned that more attacks could follow.
However, the President later changed his position, announcing that planned strikes against Iran had been suspended after discussions reportedly reached Iran’s top leadership.
Following the development, Brent crude, the international benchmark, fell by more than three per cent to below $90 per barrel, trading at about $89.99 by 7:30 p.m. Nigerian time.
West Texas Intermediate (WTI), the US benchmark, also declined by over three per cent to around $87 per barrel.
Market participants have been closely watching events around the Strait of Hormuz, a strategic waterway between Iran and Oman that serves as a major route for global oil shipments.
The passage normally carries a substantial share of the world’s crude and natural gas exports, making any disruption a major concern for energy markets.
Trump, in a statement shared on Truth Social, said he had cancelled planned military action after receiving confirmation that negotiations with Iran had progressed.
“Discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved,” he said.
He added that the talks involved several countries, including the United States, Israel, Saudi Arabia, the United Arab Emirates, Qatar, Turkey, Pakistan, Bahrain, Kuwait, Jordan and Egypt.
The US President said, however, that naval restrictions against Iran would remain until a final agreement is reached.
“The naval blockade will remain in full force and effect until this transaction is finalised,” Trump stated.
Energy analysts said the direction of oil prices in the coming days would depend largely on whether the reported negotiations lead to a lasting easing of tensions and restore confidence in regional supply routes.
Leave a Reply