PiCK

Brent Crude Slides 14% as Trump's Two-Week Iran Halt Eases Supply Fears

Source

YM Lee

Summary

Expectations for easing military tensions between the US and Iran sent international oil prices sharply lower, returning the market to a more stable footing.
Brent crude fell about 14%%, while WTI dropped more than 12%%, reversing much of the earlier supply-shock premium.
Markets are watching whether progress in negotiations over the next two weeks becomes the key driver of oil price direction.

Forecast Trend Report by Period

International oil prices tumbled and returned to a more stable footing as expectations grew for an easing in military tensions between the US and Iran.

TradingView data on July 7 showed Brent crude falling $14.702 from the previous day to $95.068 a barrel, a drop of nearly 14%. West Texas Intermediate fell $13.656 to $98.754, down more than 12%.

The decline followed comments by US President Donald Trump that he would halt military attacks on Iran for two weeks. Trump said he had decided to suspend bombings and attacks on Iran for two weeks on the condition that Iran fully, immediately and safely reopen the Strait of Hormuz.

He described the move as a "double sided ceasefire" that applies to both sides. He added that the US had not only achieved all of its military objectives, but exceeded them.

Trump also said he had received a 10-point proposal from Iran that could serve as a practical basis for negotiations. Most major issues have already been agreed, he said.

He added that the two-week pause would provide time to complete a final agreement.

Oil had surged earlier on the fallout from the war with Iran. Concerns over a possible closure of the Strait of Hormuz, which handles about 20% of global crude shipments, had pushed spot Brent above $144 a barrel and fueled fears of a supply shock.

But news of the ceasefire eased concerns over supply disruptions, triggering a swift reversal in the market. Investors are now watching whether negotiations make progress over the next two weeks, a key factor in determining oil's direction.