Global oil markets witnessed a sharp decline on Thursday. Prices dropped significantly after comments from United States President Donald Trump eased investor worries about potential supply disruptions from Iran.
Market Reaction to Presidential Remarks
West Texas Intermediate crude fell by three percent to settle at $60.16 per barrel. Brent crude slipped 2.93 percent, reaching $64.57 per barrel. This marked a notable reversal from Wednesday's gains.
The price drop followed President Trump's unexpected statement from the White House. He indicated that Iranian authorities had halted the killing of protesters. Trump also mentioned that planned executions would not proceed.
Trump's Statement on Iran Situation
"They've said the killing has stopped and the executions won't take place," Trump told reporters. "There were supposed to be a lot of executions today and that the executions won't take place -- and we're going to find out."
When questioned about potential military action, the President responded he would "watch it and see." These comments came after days of Trump speaking about supporting Iranian people during protests.
Rights groups report the crackdown on demonstrations has resulted in at least 3,428 deaths. Earlier fears that this unrest could affect crude supplies had pushed oil prices higher on Wednesday.
Analysts Weigh In on Market Movement
Kyle Rodda of Capital.com explained the market reaction clearly. "Oil prices dropped on comments from US President Donald Trump that Iran would refrain from any further killing of protesters," Rodda stated. "This watered down fears of a looming supply shock in energy markets."
Michael Wan, an analyst at financial group MUFG, provided important context about Iran's role in global oil production. "Iran contributes around three percent of global oil output," Wan highlighted earlier this week.
On Thursday, Wan added further perspective about the geopolitical situation. He noted Trump's comments came "even as the United States has redeployed some personnel in Qatar and other American bases." This redeployment occurred due to ongoing tensions and possible Iranian threats to target those locations.
Understanding the Price Volatility
The oil market has shown significant sensitivity to developments in Iran recently. Wednesday saw benchmarks rise about 1.5 percent as concerns mounted about supply disruptions. Thursday's sharp reversal demonstrates how quickly sentiment can change based on political statements.
Global energy markets remain closely tied to geopolitical developments in oil-producing regions. Iran's position as a significant crude exporter means any instability there immediately affects global pricing. Investors continue monitoring the situation for further developments that might impact supply chains.
