Oil prices declined on Thursday as optimism surrounding a potential agreement between the United States and Iran to de-escalate the Middle East conflict and reopen the Strait of Hormuz alleviated market concerns. Crude prices have fallen more than 5% during the week, dropping below the $100 per barrel mark.
Market Movements
Around 7:20 am, West Texas Intermediate (WTI) crude was trading at $90.09, up 1.59%, recovering from an earlier low of $89 per barrel. The US benchmark Brent crude stood at $96.07, gaining 1.89% after touching the $95 level.
Iran's Stance
Iran's Revolutionary Guards stated that a return to war with the United States was unlikely, while also warning that the country remains prepared to respond to any attack. This came as US President Donald Trump indicated he was not rushing towards an agreement, despite earlier remarks over the weekend suggesting a deal was close.
Trump's Remarks
During a cabinet meeting at the White House, Trump reiterated his commitment to securing what he described as a favorable ceasefire deal with Iran. He dismissed suggestions that the ongoing conflict could politically harm Republicans in the United States, saying he was focused on preventing Iran from developing nuclear weapons. "They thought they were going to outwait me, you know? We'll outwait him; he's got the midterms, I don't care about the midterms," Trump said. "Iran cannot have nuclear weapons. I'm doing that for the world, not just for us," he added.
Strait of Hormuz
Speaking about the Strait of Hormuz, Trump said the route would remain accessible to all countries and described it as part of the ongoing negotiations. "It's international waters. Nobody's going to control it. We're going to watch over it. We'll watch over it, but nobody's going to control it," Trump stated. "That's part of the negotiation that we have."
Trump also warned Oman against interfering in the negotiations related to the Strait of Hormuz and rejected the idea of a short-term arrangement that would allow Iran and Oman to control the waterway, which is critical for global oil and gas supplies. "Oman will behave just like everybody else, or we'll have to blow 'em up," he said.
Background of the Conflict
The Strait of Hormuz has remained closed for the past three months, straining oil supplies across the world. The conflict began on February 28, when the US and Israel launched joint strikes on Iran. In response, Tehran tightened its control over the crucial Strait of Hormuz, an oil pipeline that carries 20% of global energy supplies.
