Crude oil prices fell on Tuesday, March 10, after surging to their highest level in more than three years in the previous session. The decline came after US President Donald Trump indicated that the ongoing Iran war could be nearing its end. Trump also warned Iran not to block the Strait of Hormuz, a crucial route through which about one-fifth of the world’s oil supply passes, helping ease fears of supply disruptions and putting pressure on crude oil prices.
In early session, the Brent oil futures tanked as much as 11 per cent to hit an intraday low at $88.10 per barrel, and the West Texas Intermediate (WTI) crude futures plunged up to 10.90 per cent to $84.45 level.
However, as of 9:40 AM, the Brent oil futures traded at $93.82, down 5.20 per cent from previous close, and WTI crude futures quoted at $89.91, down 5.13 per cent.
Both the oil benchmarks had surged to $119.50 per barrel level in the prior session after Saudi Arabia, Kuwait and other producers announced supply cuts during the widening US-Israeli war with Iran fuelled concerns over global supply disruptions. From this level the Brent contract is down over 21 per cent and the WTI contract is down by nearly 25 per cent.
In the domestic derivatives market, crude prices mirrored the fall in global benchmarks. The crude oil futures on the Multi Commodity Exchange (MCX) fell by as much as Rs 527, or 6 per cent, to touch the day’s low at Rs 8,261 per barrel. Around the same time, the domestic contract quoted at Rs 8,350 per barrel, down by Rs 438, or 4.98 per cent.
The ease in oil prices came after Trump, speaking at a news conference in Florida on March 9, claimed the US was “achieving major strides towards completing our military objective,” adding that “some people could say they are pretty well complete.” His remarks came on the same day when he held a phone call with his Russian counterpart Vladimir Putin.
Trump also warned Iran against blocking the Strait of Hormuz, saying any attempt to disrupt oil flows through the key shipping route would trigger a strong response from the United States.
In a post on Truth Social, Trump said that if Iran interferes with oil shipments through the strait, it would be hit by the US “TWENTY TIMES HARDER than they have been hit thus far.”
He also cautioned that the US could strike Iranian targets that are “easily destroyable” and warned that “Death, Fire, and Fury will reign upon them,” though he added that he hopes such a situation does not arise.
Trump further described the continued flow of oil through the Strait of Hormuz as “a gift from the United States of America to China, and all of those Nations that heavily use the Hormuz Strait.”
