Oil falls as Trump downplays prospect of escalation with Iran
USO•Brent crude fell 70 cents, or 0.75%, to $91.88 a barrel, while U.S. WTI fell 78 cents, or 0.90%, to $86.07. Prices declined as Trump said he would hold off on new military strikes against Iran for now, while keeping a naval blockade in the Strait of Hormuz.
1. Oil prices decline
Oil prices fell, extending the previous session’s losses, after Trump downplayed the need for military action against Iran “at this point.” By 0246 GMT, Brent was down 70 cents, or 0.75%, at $91.88 a barrel and WTI was down 78 cents, or 0.90%, at $86.07; both benchmarks had fallen 1% earlier.
2. Iran and supply risks
Trump said he would hold off on new military strikes for now after appeals from countries in the region, but planned to maintain a naval blockade in the Strait of Hormuz. Analyst Tim Waterer said markets were responding to Trump’s more conciliatory tone, while attacks on shipping had not escalated enough to add a fresh risk premium.
3. Output and market outlook
A Reuters survey found OPEC oil output rose in October, led by gains in Saudi Arabia, Kuwait and Iraq despite continued export constraints. Brent had retreated about 22% from its October 30 six-month high of $118. Gregory Brew said prices were unlikely to fall below $90 without more durable signs of de-escalation and a U.S.-Iran deal, while shipping risks remained high.
