Trump says Iran war could be over soon but warns against oil disruption
European natural gas dropped after US President Donald Trump predicted the Iran war will end soon, as he faces mounting pressure over how the conflict has upended energy markets.
Benchmark futures fell as much as 16pc, following oil, after extreme price swings in the previous session. Trump said he didn’t believe the conflict would be over this week, but insisted the operation was ahead of schedule and the conflict could be resolved “very soon.”
Oil prices also fell on Tuesday after hitting a more than three-year high in the previous session as President Trump’s comments eased concerns about prolonged disruptions to global oil supplies. Brent futures fell $6.28, or 6.3%, to $92.68 a barrel at 0715 GMT, while U.S. West Texas Intermediate (WTI) crude was down $6.19, or 6.5%, to $88.58 a barrel. Both contracts fell as much as 11% earlier before paring some losses. Oil surged past $100 a barrel on Monday to the highest since mid-2022,
Trump’s words offer some relief to energy markets, but they “will only go so far,” ING Groep NV strategists Warren Patterson and Ewa Manthey wrote in a note. Flows through the strategic Strait of Hormuz will need to resume to sustain a move lower in prices, they said.
The waterway is used to handle about a fifth of global liquefied natural gas flows, mainly from the world’s biggest plant in Qatar, which has been shut since last week. Attacks in the region haven’t abated so far, with several Middle Eastern countries announcing missile threats, sounding sirens or intercepting drones on Tuesday.
The conflict, now in its second week, upended global oil and gas trade, threatening the worst supply shock to the market since Russia’s invasion of Ukraine in 2022. For European gas, the situation is critical as the region’s fuel reserves are unusually low and it needs to import large volumes of fuel this summer to refill its tanks before next winter.
Dutch front-month futures, Europe’s gas benchmark, traded 15pc lower at €48.27 a megawatt-hour by 8:12 a.m. in Amsterdam. (Bloomberg)
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