Trump Says China Can Continue Buying Oil From Iran, Pushing Prices Lower Amid De-Escalating Israel-Iran Tensions
Synopsis
West Texas Intermediate crude oil futures traded 5.4% lower at $64.81 per barrel at the time of writing, while Brent crude oil futures fell 5.5% to $66.64 per barrel.
U.S. President Donald Trump said on Tuesday that China can continue buying oil from Iran amid the announcement of a truce with Israel in the 12-day war. This added further downward pressure on crude oil prices.
U.S. West Texas Intermediate (WTI) futures traded 5.4% lower at $64.81 per barrel at the time of writing, while Brent crude oil futures fell 5.5% to $66.64 per barrel.
“China can now continue to purchase Oil from Iran. Hopefully, they will be purchasing plenty from the U.S., also. It was my Great Honor to make this happen!” President Trump said in a post on Truth Social.
This comes after Trump announced a ceasefire between Israel and Iran, although he said both countries violated it within hours of his announcement. Trump issued a warning against them both, but was especially upset with Israel.
The ceasefire violations and Iran’s attack on U.S. bases in Qatar on Monday notwithstanding, crude oil prices plummeted 7% and continued their decline on Tuesday.
“Investors mostly shrugged at what appeared on the surface a seismic geopolitical event over the weekend, and those who kept their nerve and held off from de-risking have so far been proven right,” Kenneth Broux, head of corporate research FX and rates at Societe Generale, told Reuters.
Crude oil ETFs fell more than 6% on Tuesday. The United States Oil Fund LP (USO) was down almost 4%, while the ProShares Ultra Bloomberg Crude Oil (UCO) was trading more than 6% lower at the time of writing.
Stocktwits data shows the retail sentiment with respect to the USO and UCO ETFs was in the ‘extremely bullish’ territory over the past week.
Meanwhile, U.S. equity markets surged on Tuesday as investors looked past the minor ceasefire violations between Israel and Iran.
At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.85%, while the Invesco QQQ Trust (QQQ) gained 1.22%.
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