Oil prices rebounded sharply on Thursday after President Trump signaled that Washington is in no hurry to strike an agreement with Iran. West Texas Intermediate crude for December delivery settled at $88.74 a barrel, up 2.6%, while global benchmark Brent rose 3.3% to settle at $95.82, according to Bloomberg via Rigzone. Eurasia Business News reported the same settlement prices.
What Trump said
In a social media post, the president wrote, “We don’t need a deal with Iran,” and said the U.S. has financial leverage and control of the Strait of Hormuz, according to Rigzone. He also told Vice President JD Vance to focus on domestic priorities rather than Iran talks, Investing.com reported.
Analysts quoted by Reuters, via Investing.com, read the comments as a sign the U.S. will keep its naval blockade of Iranian ports and its sanctions in place rather than return to military strikes. That points to a longer period of uncertainty for shipping through the Gulf, a key route for global oil supply.
Risks still in the shipping lanes
The region remains tense. Iran said two supertankers were halted by explosions late Wednesday on a route Tehran described as unauthorized, according to Rigzone, citing Iranian state media. Verisk Maplecroft counted 36 attacks on commercial vessels in the Gulf region in October, the highest monthly total since the conflict began, according to Investing.com.
Why prices are still down for the week
Despite Thursday’s jump, oil is headed for a second straight weekly loss. Brent was on track for a weekly drop of more than 3%, following a 16% plunge the week before, according to Investing.com. Several supply factors are weighing on prices:
- The International Energy Agency says global oil supply has moved above demand for the first time since the war began in late February.
- Gulf crude exports have recovered to about three-quarters of pre-war levels, and OPEC said its October output rose to 27.16 million barrels a day.
- U.S. crude inventories rose by 4.7 million barrels last week, the biggest increase since early August, according to government data cited by Bloomberg.
Early Friday, prices were giving back some of Thursday’s gains. WTI was near $87.84 and Brent near $95.21 as of about 5:40 a.m. ET, according to Investing.com.
Why it matters for the economy
Higher energy costs feed directly into inflation, which is already running hot. Energy prices helped push September’s producer price index up 1.3%, and October’s reading is due Friday morning. Rising oil also lifted Treasury yields on Thursday, with the 10-year yield reaching 5.10%, according to Yahoo Finance. With the Federal Reserve widely expected to raise rates at its December 9 decision, every swing in crude now carries extra weight for borrowers and investors alike.
