Oil plummets after Trump’s statements and pierced $100

Crude oil futures they collapsed immediately after Trump claimed to have held talks to de-escalate the tension, although Tehran flatly denied that any negotiations were underway.

The barrel of Brent fell up to 14% and touched US$96, before cutting a good part of the losses after the Iranian denial. In parallel, European natural gas also registered a pronounced fall, although the decline later moderated.

“The market reaction was categorical. “Oil prices plummeted, with WTI hitting lows below US$85,” noted an Outlier report, which also highlighted that stock markets in Europe and the United States “turned around,” while volatility indicators and Treasury bond yields also fell.

However, the rebound was not long in coming. After Iranian authorities assured that there are no “direct or indirect” contacts with Washington, crude oil recovered part of the lost ground. According to Outlier, WTI returned to above US$90, while Brent returned to levels close to US$100.

The background to the volatility is an energy market that has been highly stressed since the start of the conflict at the end of February. The virtual blockade of the Strait of Hormuz – key to global trade – has interrupted about a fifth of the world’s flow of oil and a similar proportion of liquefied natural gas. The International Energy Agency described the situation as the largest supply disruption in the history of the oil market.

In this context, Trump’s statements are part of a series of interventions by the US government aimed at moderating energy prices. In recent weeks, Washington also announced the release of strategic reserves and eased some sanctions on Iranian and Russian crude to compensate for the loss of supply.

This Monday’s sharp movements add to a string of extreme oscillations since the start of the war: four of the six largest historical variations in Brent futures were recorded since the end of February.