Global oil prices dropped sharply on Thursday after comments from Donald Trump eased immediate fears of US military action against Iran, prompting traders to unwind part of the geopolitical risk premium built up over recent days.
Brent crude fell by nearly 3%, pulling back 2.66% to trade around $64.75–$65 per barrel in early Asian hours. US benchmark West Texas Intermediate (WTI) also declined 2.69%, hovering close to $60 per barrel, according to market data around 02:12 GMT.
The sell-off followed remarks by President Trump late on Wednesday, in which he said he had received assurances that killings linked to Iran’s crackdown on protests had been halted. While Trump said he would continue to “watch it and see,” markets interpreted the comments as reducing the likelihood of imminent US military intervention.
Oil prices had rallied strongly over the past week, gaining around 10–11%, as investors priced in the risk of escalating tensions with Iran, a key producer within OPEC. Any disruption to Iranian supply had been seen as a potential threat to global oil flows.
The pullback was also reinforced by broader market fundamentals. Data from the U.S. Energy Information Administration showed larger-than-expected builds in US crude and gasoline inventories, adding to concerns about near-term oversupply.
Additional pressure came from the resumption of Venezuelan oil shipments following recent policy shifts, increasing the prospect of more barrels entering the global market. Analysts also point to growing expectations of a supply surplus in 2026, with several banks forecasting weaker prices ahead.
Goldman Sachs, for example, has projected lower average oil prices next year, citing rising non-OPEC supply and moderating demand growth.
Despite the latest decline, analysts say oil markets remain sensitive to developments in the Middle East, with traders closely monitoring political signals from Washington and Tehran for any indication of renewed escalation.
