TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search results
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search resultsOil falls as Trump predicts Middle East de-escalation
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
An oil platform operated by Lukoil company is pictured from a helicopter carrying members of a local election committee and journalists during the early voting for the parliamentary election, at the Kravtsovskoye oilfield in the Baltic Sea, Russia, on Sept. 16, 2021. (Reuters/Vitaly Nevar)
O
il prices fell on Tuesday after hitting an over three-year high in the prior session as US President Donald Trump predicted the war in the Middle East could end soon, easing concerns about prolonged disruptions to global oil supplies.
Brent futures fell $4.17, or 4.2 percent, to $94.79 a barrel at 0345 GMT, while US West Texas Intermediate (WTI) crude CLc1 was down $3.81, or 4 percent, to $90.96 a barrel. Both the contracts fell as much as 11 percent earlier before paring some losses.
Oil surged past $100 a barrel on Monday to hit their highest since mid-2022, as supply cuts by Saudi Arabia and other producers during the expanding US-Israeli war with Iran stoked fears of major disruptions to global supplies.
Prices later retreated after Russian President Vladimir Putin held a call with Trump and shared proposals aimed at a quick settlement to the Iran war, according to a Kremlin aide, easing concerns about a prolonged supply disruption.
Trump said on Monday in a CBS News interview that he thinks the war against Iran "is very complete" and that Washington was "very far ahead" of his initial four- to five-week estimated timeframe.
"Clearly Trump's comments about a short-lived war has calmed markets. While there was an overreaction to the upside yesterday, we think there is an overreaction to the downside today," said Suvro Sarkar, energy sector team lead at DBS Bank, adding that the market is underappreciating risks at these levels for Brent.
"Murban and Dubai grades are still well above $100 per barrel, so practically nothing much has changed in terms of ground realities," he added, referring to benchmark Middle Eastern oil grades.
In response to Trump, Iran's Islamic Revolutionary Guards Corps (IRGC) said they would "determine the end of the war," and Tehran would not allow "one liter of oil" to be exported from the region if US and Israeli attacks continued, state media reported on Tuesday, citing the IRGC's spokesperson.
Prices, however, remain under pressure as Trump considers easing oil sanctions on Russia and releasing emergency crude stockpiles as part of a package of options aimed at curbing spiking global oil prices, according to multiple sources.
"Discussions around easing sanctions on Russian oil, comments from Donald Trump hinting that the conflict could eventually de-escalate, and the possibility of G7 countries tapping strategic oil reserves all pointed to the same message - that oil barrels will somehow continue to reach the market," said Phillip Nova analyst Priyanka Sachdeva in a note on Tuesday.
"Once traders sensed that supply routes could still be maintained, the initial 'panic premium' that had pushed prices above the $100 mark yesterday started to fade, and oil prices quickly pulled back."
G7 nations had said on Monday they were prepared to implement "necessary measures" in response to surging global oil prices but stopped short of committing to release emergency reserves.
