Brent and WTI Crude Fall Over 4% After Trump Says "Watch and See" on Iran
Brent and WTI crude drop over 4% after Trump moderates rhetoric on Iran protests, easing fears of supply disruption.
Global oil prices fell sharply on Thursday after U.S. President Donald Trump softened his stance on Iran, easing fears of a potential escalation that could disrupt global energy supplies. International benchmarks Brent North Sea crude and West Texas Intermediate both dropped more than four percent after Trump said he would “watch it and see” regarding any possible intervention in Iran, signaling a pause in earlier aggressive rhetoric.
Trump also said he had been informed that the killing of protesters in Iran had stopped, further calming market nerves. Oil prices had risen strongly in recent days as the U.S. president spoke about supporting the Iranian people amid a violent crackdown on demonstrations, raising concerns about geopolitical risk and supply disruptions in the Middle East. Analysts said the latest comments prompted investors to rapidly price out the political risk premium.
“As tensions are dialed down between Iran and the U.S., the political risk premium is rapidly getting priced out of the oil price,” said Kathleen Brooks, research director at XTB. The pullback highlighted how sensitive energy markets remain to signals from Washington, particularly when tensions involve a major oil-producing region.
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Equity markets responded more positively, with U.S. stocks rebounding after two consecutive losing sessions. All three major U.S. indices ended moderately higher, led by a 0.3 percent gain in the S&P 500. Investor sentiment was supported by a stronger-than-expected fourth-quarter profit report from Taiwanese chipmaker TSMC, which boosted technology stocks, particularly in early trading.
Markets outside the U.S. showed mixed performance. London’s FTSE 100 hit a fresh record high after data showed the British economy rebounded in November, while Frankfurt rose on signs Germany narrowly avoided a third consecutive year of recession. Paris slipped slightly, weighed down by energy stocks following oil’s retreat. In Asia, Tokyo closed lower, while gold and silver prices eased as investors reduced exposure to safe-haven assets amid improving risk sentiment.
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