Crude oil prices fell in early Asian trading on Friday, October 9, after US President Donald Trump said that they would not attack Iran before the mid-term elections take place on November 3.
Brent crude prices are down 0.6% this morning, having gained over 4% overnight to close above the mark of $104 a barrel. US Crude or the West Texas Intermediate is also trading with losses of a similar quantum at around $90 a barrel.
In a post on Truth Social on Thursday, Trump said that the US is engaging in productive discussions with Iran and that the Strait of Hormuz continues to be controlled by the US, while maintaining that Iran will not have a nuclear weapon. He also said that oil through the Strait of Hormuz is flowing in record volumes.
Trump’s decision comes after attacks in the crucial waterway had increased on oil and commercial tankers. According to the UK Maritime Organization, there were at least nine attacks in the Strait of Hormuz and the Persian Gulf during the first seven days of October, which is already 50% of the total attacks that took place in September.
After Trump’s remarks, the New York Times reported that the US had drawn up plans to attack Iran for three days and target drone and missile arsenals, energy facilities and other sites. What is also keeping prices elevated is the ongoing fight between the Saudis and the Houthis in Yemen and the soaring tanker freight rates.
Iran’s Fars news agency also reported that several “heavy explosions” occurred in the Strait of Hormuz late Thursday night when oil tankers attempting to cross the southern route of the waterway were hit by mines, citing unidentified sources of Iran’s military. There is no independent confirmation of this report.
Crude oil traders are also tracking Hurricane Isaias, which is expected to make landfall along the US Gulf Coast late Friday or early Saturday. Alabama, Mississippi and Florida Panhandle are at risk. About 1.3 million barrels per day of oil supply, more than 60% of the region’s output has gone off bounds due to the storm.
