Trump Cancels Strike, Oil Immediately Plunges
Oil prices fell sharply to their lowest level since April on Thursday (June 11) after US President Donald Trump said a peace deal with Iran could be signed as early as this weekend. This statement caused the market to unwind some of the geopolitical risk premium that had previously supported oil prices during the conflict.
Brent fell 2.9% to close at US$90.38/barrel, while WTI weakened 2.6% to US$87.71/barrel in New York. The decline continued after Trump stated that the US "just made a major settlement" regarding the war with Iran and suggested the signing could take place in Europe with Vice President JD Vance present.
Earlier, Trump also canceled plans for a military strike against Iran. He withdrew threats to attack Tehran and seize the Kharg Island oil terminal, a key hub for Iranian oil exports. This change in tone reinforced hopes that diplomacy could again mitigate the risk of energy supply disruptions.
However, the market remains uncertain as there has been no official confirmation from Iran. The semi-official Fars news agency reported that Tehran has not yet agreed to any agreement text with the US. In recent months, Washington's message has also shifted rapidly, from military threats to claims that a deal is imminent.
Supply factors have also weighed on prices. The number of tankers moving through the Strait of Hormuz has reportedly increased, resulting in oil flows from the Gulf region recovering from previously limited levels. Trump said more than 100 million barrels of oil have passed through the waterway since a secret US mission to support maritime trade in the region began.
However, market risks have not disappeared. US oil inventories, including strategic reserves, fell by 15 million barrels last week and have declined by more than 70 million barrels in the past five weeks. Fuel inventories in Singapore are also at their lowest level since 2013. This means that oil prices may have fallen due to peace hopes, but the physical market still shows tight supplies. (Arl)
Source: Newsmaker.id
