Islamabad – Global crude oil markets experienced a sharp decline on Thursday after United States President Donald Trump issued statements that appeared to ease fears of a military escalation involving Iran. Traders reacted quickly, sending key benchmarks down by more than 3 per cent in early trading.
According to market analysts, Brent crude, which had reached around $66.50 per barrel earlier in the week due to geopolitical concerns, dropped to approximately $64.30–$64.60 per barrel following Trump’s remarks. Similarly, West Texas Intermediate (WTI) crude slipped toward the $60-per-barrel level, reflecting a significant market correction.
The fall in oil prices comes after Trump indicated that the United States does not seek war with Iran and highlighted signs that executions and violent crackdowns in Iran’s domestic protests may be easing. The statements reduced the “geopolitical risk premium” — the extra cost factored into oil prices when supply disruptions are feared — prompting global traders to reassess short-term risk.
Experts note that oil markets remain highly sensitive to Middle Eastern tensions, particularly around Iran, which plays a critical role in global energy supply. The recent price drop underscores how rapidly market sentiment can shift when geopolitical risks appear to subside, even temporarily.
Adding to the downward pressure, recent US crude and gasoline inventory reports showed larger-than-expected stockpiles, signaling stronger supply than anticipated. Analysts also pointed out that gradual adjustments in production from other oil-producing nations, including Venezuela, could further ease supply concerns and limit price spikes.
Despite the relief, market watchers caution that volatility is far from over. Any sudden developments in US-Iran relations, OPEC production decisions, or regional unrest could quickly reverse the trend, keeping crude prices highly reactive to geopolitical and economic news.
The recent slide in oil prices reflects the delicate balance between global supply, demand, and geopolitical risk, showing how closely energy markets monitor political developments in the Middle East. Traders and investors remain vigilant as uncertainty in the region continues to influence market dynamics and global energy costs.
This story has been reported by PakTribune. All rights reserved.