Oil falls as Trump says new Iran strikes ‘highly unlikely’

Oil prices fell when trading opened in Asia on Monday, Nov. 9, after President Donald Trump said he was highly unlikely to order new attacks on Iran as long as talks to end the conflict make progress, Reuters Thomson Reuters Corporation ↘ 4.69% reported. Both countries also reported that ships had been hit in or near the Strait of Hormuz. Brent briefly fell more than $1 a barrel and stayed below $100. U.S. West Texas Intermediate also slipped, according to Business Standard.business-standard.com+1

The drop added to last week's sell-off. Brent fell more than 16% that week, according to Investing.com. The Economic Times called it crude's sharpest weekly fall since April 2020.economictimes.com+1

Trump's CNN Interview

"It depends on whether or not they sign a very strong agreement," Trump told CNN's Jim Sciutto on Sunday during a 20-minute phone call. He said the U.S. would likely not need to return to war while talks on Tehran's nuclear program and reopening the Strait of Hormuz move forward, and he repeated the point five times, CNN reported. He also said he could still strike Iran, according to CNBC.cnn.com+1

Trump had hinted that he might renew major attacks after the Nov. 3 midterm elections. So far there has been no sign of a large U.S. military operation, and Iran has said it would respond by striking U.S. and Israeli targets, Business Standard reported. Trump has acknowledged that the war, which pushed up fuel prices, contributed to Republicans' defeat in the midterms, according to Bloomberg.bloomberg.com+1

Shipping Attacks Continue

Shipping in the region is still under attack. Iran's Revolutionary Guards said two oil tankers caught fire after hitting mines on an "unauthorized route" in the strait, Reuters reported. U.S. Central Command said its forces disabled the bulk carrier Huda after it tried several times to get past the U.S. blockade of Iranian ports, according to Seatrade Maritime. The UK Maritime Trade Operations centre counted 11 attacks on commercial ships in the week to Nov. 4, and three of those vessels sank, Middle East Eye reported. On Sunday, Houthi strikes on Riyadh caused minor damage to offices of Saudi Aramco, according to The Economic Times.middleeasteye.net+3

Goldman Sees Higher Prices

Some analysts expect the market to stay tight. Goldman Sachs ↘ 0.36% raised its forecasts on Nov. 1, before the post-election sell-off. It lifted its December Brent forecast to $105 a barrel from $90 and its WTI forecast to $94 from $81, according to Bloomberg and TheStreet. In its upside scenario, Brent could average about $130 in 2027 and reach $140 if Gulf output stays 3.5 million barrels a day below its 2025 average. "Intensified shipping attacks, damage to oil infrastructure, and a more persistent risk premium remain the key triggers of potential upside," the bank said, according to BOE Report.thestreet.com+2

JPMorgan ↘ 0.84% analysts said it is still hard to predict how the war will unfold. Seven months in, there is no clear strategy to end it, The Economic Times reported.economictimes.com