Oil prices dip after Trump comments on Iran
US President says new military strikes are unlikely if talks progress
Oil prices fell in early trading on Monday. Brent crude reached 97.09 dollars per barrel while West Texas Intermediate dropped to 90.16 dollars.
The shift follows President Donald Trump stating that new offensives against Iran are highly unlikely. The president tied peace to progress in negotiations and the signing of a robust agreement between the parties.
Trump pointed to the Iranian economic situation to justify his current stance. He noted that the nation is facing 301% inflation and is suffering from the impact of financial sanctions and previous military actions.
These remarks ease the geopolitical tension that dominated the energy landscape at the start of November. At that time, there was an expectation that hostilities might resume shortly after the US midterm elections.
The reduction of tensions in the Middle East tends to lower the geopolitical risk premium on oil. This could push the dollar down and reduce global inflationary pressure.
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