Oil markets turned volatile on Thursday, with prices first falling near the $100 per barrel level and then rebounding sharply as traders reacted to US President Donald Trump’s address to the nation.
Sentiments remained cautious as the speech failed to allay investors’ concerns about the disruption of the Strait of Hormuz, with the US President calling on other countries to help reopen it. In early trading, both benchmarks fell by more than $1 amid anticipation for Trump’s address to the nation. Brent crude futures fell $1.16, or 1.15%, to $100 per barrel by 1204 GMT, while US West Texas Intermediate crude fell $1.41, or 1.41%, to $98.71 per barrel.
The decline continued the losses incurred in the previous session, as markets considered the possibility of the United States withdrawing after Trump told Reuters that the conflict would end “fairly soon.” However, sentiment changed dramatically once the president delivered his prime-time remarks. Instead of signaling a de-escalation, Trump urged other countries to intervene and reopen the Strait of Hormuz, a key global oil route that remains closed.
Thus, after the speech, Brent crude rose more than 4% to $106, while WTI rose 3% to $103. Both contracts were in the red before he began his speech. Speaking at 9 p.m. EDT from the White House, Trump outlined progress in the conflict and emphasized his administration’s goals, including dismantling Iran’s missile production and naval capabilities, preventing its proxies from destabilizing the region, and ensuring it does not obtain a nuclear weapon. “To those countries that can’t get fuel, many of whom have refused to participate in decapitating Iran, I have a proposal: No. 1, buy oil from the United States. And No. 2, build up some belated courage, go into the strait, and seize it. Iran has basically been eliminated. The hard part is done,” he said. Referring to Operation Epic Fury, Trump said that recent military actions had greatly weakened Iranian forces.
He stated that “Iran’s ability to launch missiles and drones has been greatly reduced, and its weapons factories and missile launchers have been blown to pieces.” He added that “the country’s navy is gone, its air force is in ruins,” and that its leaders are “now dead,” while the Islamic Revolutionary Guard Corps is being destroyed “as we speak.”
“ This speech was his first prime-time speech since launching strikes alongside Israel more than a month ago. Trump said in his statements: “In the past four weeks, our armed forces have achieved rapid, decisive, and overwhelming victories on the battlefield.”The speech came as the ongoing war in the Middle East entered its second month, and Iran’s grip on the Strait of Hormuz tightened, effectively disrupting global oil supplies.
