Oil prices drop 3% after Trump comments on Iran

Following remarks made by US President Donald Trump that allayed concerns about instability in Iran, oil prices fell on Thursday.

Following Trump’s statement that he had been informed that the executions of demonstrators in Iran had stopped, West Texas Intermediate fell 3.0 percent to $60.16 per barrel, while Brent crude fell 2.93 percent to $64.57.

The US president stated that he will “watch it and see” regarding possible military action in an unexpected announcement at the White House.

“They’ve said the killing has stopped and the executions won’t take place — 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,” he said.

Trump had repeatedly talked in recent days about coming to the aid of the Iranian people over a crackdown on protests that rights groups say has left at least 3,428 people dead.

Concern that the situation could restrict supplies of crude had caused oil prices to rise around 1.5 percent on Wednesday.

“Oil prices dropped… on comments from US President Donald Trump that Iran would refrain from any further killing of protesters, watering down fears of a looming supply shock in energy markets,” said Kyle Rodda of Capital.com.

Iran makes up three percent of global oil production, analyst Michael Wan of financial group MUFG noted this week.

Wan said Thursday that Trump’s latest comments “come even as the United States has redeployed some personnel in Qatar and other American bases from ongoing geopolitical tensions and possible Iranian threats to target those locations”.