Oil prices fall more than 5% after Trump says China can continue buying oil from Iran
Key Points
- President Donald Trump said China can keeping buying oil from Iran.
- Trump’s statement is a sign that the U.S. is easing its maximum pressure campaign on the Islamic Republic.
- Oil has sold off sharply after Israel and Iran agreed to a ceasefire, though the deal came close to collapse early Tuesday.
Oil prices fell sharply Tuesday after President Donald Trump said China can keep buying oil from Iran, a sign that the U.S. is easing its maximum pressure campaign on the Islamic Republic in the wake of a ceasefire with Israel.
Global benchmark Brent
fell $4.06, or 5.68%, to $67.42 per barrel by 12:23 p.m. ET. U.S. crude oil
was last down $3.88, or 5.66%, to $64.63 a barrel. Prices closed 7% lower on Monday as the oil market bet that the conflict in the Middle East was winding down.
“China can now continue to purchase Oil from Iran,” Trump said in a post on his social media platform Truth Social. “Hopefully, they will be purchasing plenty from the U.S., also. It was my Great Honor to make this happen!”
Trump threatened in May to bar any country buying Iranian oil from doing business with the U.S. China purchases the vast majority of the 1.7 million barrels per day that Iran typically exports, according to data from Kpler.
“Trump has always seemed loath to remove Iranian supply from the market, given the upward pressure on oil prices it would have,” said Matt Smith, lead oil analyst at Kpler. “Now he has no beef with Iran given its diminished nuclear capabilities — his focus is shifting to getting oil prices back down.”
Oil prices have tumbled to levels last seen before Israel started bombing Iran on June 13, as investors now believe the risk is low that a major supply disruption will occur in the Middle East.
The U.S. decision to join Israel’s campaign and bomb three key nuclear sites in Iran over the weekend initially triggered fears that Tehran might try to choke off oil exports from the Persian Gulf in retaliation.
Source: CNBC
