Oil prices declined on Monday after US President Donald Trump played down the possibility of renewed military strikes on Iran, easing fears of further escalation in the Middle East. Brent crude fell $1.65, or 1.7%, to $96.67 a barrel, while US West Texas Intermediate dropped 96 cents, or 1%, to $89.87 by 0830 GMT. The decline followed Brent’s 16% plunge last week, marking its steepest weekly fall since the beginning of the COVID-19 pandemic.
Trump said on Sunday that he was unlikely to order fresh attacks on Iran as long as negotiations to end the conflict continued. However, reports of attacks on ships in and around the strategically important Strait of Hormuz have kept concerns over global oil supplies alive. Market analysts said prices were reflecting hopes of de-escalation, although the absence of a comprehensive agreement between Washington and Tehran continues to leave a geopolitical risk premium. Meanwhile, analysts expect Brent crude to find near-term support around $93 a barrel.
Adding to the pressure on oil prices, JPMorgan warned of a potential global supply glut as recovering Middle Eastern oil flows, rising production elsewhere and weaker demand push supply beyond consumption. The bank estimated a surplus of 1.1 million barrels per day in September, widening to 1.4 million barrels per day in October. Separately, Iran-aligned Houthis claimed responsibility for an attack on Saudi Aramco’s offices in Riyadh, while a Ukrainian drone attack reportedly triggered a fire at Russia’s Kirishi oil refinery, highlighting the continuing geopolitical risks surrounding global energy supplies.
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