Crude oil price moved higher today, adding some 5% from Wednesday, following President Donald Trump’s address to the nation, in which he said the United States would continue attacking Iran.
Brent crude was trading at $107.49 per barrel at the time of writing, up by over 6% from Wednesday. WTI was up by over 5%, trading at $105.25 per barrel.
The U.S. president added that the army had come close to accomplishing its goals in the war, saying that “We are going to finish the job, and we’re going to finish it very fast. We’re getting very close”.
The address comes after weeks of conflicting statements from the U.S. president, in which he has consecutively claimed, among other things, that there were negotiations ongoing with the Iranian government and these were productive; that Iran had asked for a ceasefire and the U.S. was considering it; that the U.S. could use the help of geopolitical allies to reopen the Strait of Hormuz; that it did not need help or, indeed, even the reopening of the strait itself; and that there may or may not be a ground operation in Iran.
For the most part, traders have taken Trump’s words at face value, with oil prices reflecting their reactions quite fast. This time, traders appear to have zeroed in on the absence of any reference to negotiations, at least according to Phillip Nova analyst Priyanka Sachdeva.
There was “no clear mention of ceasefire or diplomatic engagement,” Sachdeva said, as quoted by Reuters, earlier today. “If tensions intensify or maritime risks increase, oil could test fresh highs as markets price in potential supply disruptions,” she added.
Meanwhile, Sparta Commodities analyst June Goh warned that even if the war ended now, it would take between three and six months for the energy industry to return to normal, from field restarts and refinery ramp-ups to petrochemicals production. Based on this, it would be safe to say that the longer the war continues, the longer it would take for things to normalize afterwards.
By Irina Slav for Oilprice.com
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