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Oil Falls as Trump Says Iran Deal is Days Away

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Oil Falls as Trump Says Iran Deal is Days Away

Oil prices declined on Tuesday after US President Donald Trump said the Iran war could end within days.

West Texas Intermediate crude oil was down 5.7% at $86.08 a barrel, while Brent was last down 4.8% to $89.70.

Trump told reporters in New York that a diplomatic resolution to the Middle East conflict could be reached in "two or three days," CNBC reported. The critical Strait of Hormuz, which remains effective shut, would reopen "immediately" after the deal, Trump reportedly said.

Trump has previously said on a number of occasions that an end to the conflict was imminent.

Iran and Israel launched direct attacks against each another over the weekend, testing an already fragile ceasefire between Washington and Tehran. Iran and Israel, however, suspended strikes against each other on Monday.

The global crude market has already lost 1 billion barrels of supply since the Iran war began at the end of February, Rystad Energy said in a note.

"Cumulative losses have now reached 1 billion barrels and are on track to nearly double by year-end under our base case, which still assumes a narrow US-Iran deal in June and a phased reopening of the Strait of Hormuz from mid-July," Aditya Saraswat, Middle East and North Africa research director at Rystad, said in a note.

That base case is now under pressure, Saraswat said.

"Despite a fragile memorandum of understanding between the US and Iran that had raised hopes of a deal, both sides have since returned to air strikes, narrowing the diplomatic track and widening the tail risk of a prolonged shock," he added.

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