Brent crude traded at $98.28 and WTI at $91.24 as traders assess whether Trump's softer tone on Iran represents a lasting policy shift or a temporary change in rhetoric.
Trump told CNN on Sunday that further US attacks on Iran are 'highly unlikely' to be necessary, easing the war risk premium in crude. WTI traded at $91.24, below last Monday's level, after the pair of benchmarks lost roughly 13% last week on de-escalation hopes. Continued tanker attacks in the Strait of Hormuz and Houthi strikes on Saudi targets limit how far prices can fall.
Brent was trading at $98.28, lower than last Monday, after Trump said new US strikes on Iran are not imminent and analysts noted hopes that supply disruptions could unwind. Saxo Bank's Ole Hansen pointed to the prospect of an end to the conflict and recovering Middle East crude flows, which follows a 13% weekly loss for Brent. Renewed escalation remains the key upside risk.
Crude oil prices declined early Monday after President Trump stated that further U.S. attacks on Iran are highly unlikely to be necessary. The market is currently weighing these de-escalation signals against ongoing reports of tanker fires in the Strait of Hormuz and Houthi strikes on Saudi targets, following a 13% loss for both benchmarks last week.
President Trump said further US attacks on Iran were highly unlikely to be necessary, which lowered the geopolitical risk premium built into crude prices.
The decline could continue if tensions ease further, but ongoing tanker attacks near the Strait of Hormuz and Houthi strikes on Saudi targets keep some supply risk in the price.
Brent was trading at $98.28 per barrel at the time of writing, down from last Monday's level after losing roughly 13% the previous week.
A resumption of attacks on tankers or Iran, or signals that Trump's softer tone is only temporary, could restore the supply risk premium.