Slight Increase in Oil Prices Despite Trump's Statements on Leaving Iran

SadaNews - Oil prices have risen slightly despite U.S. President Donald Trump's remarks that the Iran war could end within weeks, as the White House continues to send more American troops to the region amid a near-total closure of the Strait of Hormuz.

Brent crude has surpassed the level of $105 a barrel after falling by 3.2% on Tuesday, while West Texas Intermediate crude traded near $103.

These movements came after Trump told reporters that the United States could leave Iran within two to three weeks, indicating that reaching an agreement with Tehran might be possible but not necessary to end the war.

Sending a New Aircraft Carrier to the Region

Trump also noted in his statements the Strait of Hormuz, which handles about one-fifth of the world's crude supplies, affirming that he sees no reason to intervene in the issue, implying that it falls on other countries.

At the same time, a U.S. official reported that a third aircraft carrier is heading to the Middle East as part of ongoing military operations against Iran, following the departure of the main carrier from the Navy for repairs.

The USS George H.W. Bush departed Norfolk, Virginia on Tuesday, heading to the area accompanied by Arleigh Burke-class destroyers, and the journey is expected to take three weeks.

The ship was sent to the Middle East after the USS Gerald R. Ford, the most expensive warship ever built at a cost of $13.2 billion, was forced to leave combat operations due to a fire that broke out in its laundry area.

In recent times, Trump's positions have swung back and forth between talking about nearing an agreement with Iran and warning of his readiness to escalate military operations.

White House spokesperson Caroline Levitt stated that the president will address the nation at 9 PM Eastern Time on Wednesday to provide an update regarding Iran.

Markets Bet on Continued Risk Premium

Even if the war ends within the timeframe set by Trump, restoring normal flows through the Strait of Hormuz, if reopened, will take time, as some energy facilities have suffered damage during the conflict.

Bloomberg quoted Priyanka Sachdeva, a market analyst at Phillip Nova, saying, "Unless the Strait of Hormuz is fully opened, price declines are more likely to be bought rather than sold." She added, "Even if de-escalation begins, shipping, insurance costs, and tanker movements will take time to return to normal."

Trump administration officials have not clearly identified the parties they are communicating with in Iran, while Iranian Foreign Minister Abbas Araghchi told Al Jazeera that he has received messages from the U.S. envoy to the Middle East, but no formal negotiations are underway. Tehran has also set certain conditions, including asserting its sovereignty over the Strait of Hormuz.

The effective closure of the waterway has choked oil and gas supplies to global markets, driving up energy prices and raising concerns of a inflation crisis. Gas prices in the United States exceeded $4 a gallon for the first time since August 2022, which could increase pressure on Trump.

Chinese-Pakistani Call for a Ceasefire

In the context of international efforts to resolve the conflict, China and Pakistan called in a joint statement on Tuesday for an immediate ceasefire and to ensure safe navigation through the Strait of Hormuz, as part of a five-point joint proposal to restore peace and stability in the Gulf and the Middle East, following talks between the foreign ministers of both countries.

Meanwhile, the number of ships crossing the Strait of Hormuz with their tracking systems activated has begun to rise, with the weekly average of crossings in both directions reaching seven ships as of Monday, compared to five ships in the previous week, according to tracking data compiled by Bloomberg. Tehran had approved several crossing operations.

Bloomberg quoted Dennis Kessler, Senior Vice President of Trading at POK Financial Securities, stating, "I believe the exaggeration and panic have started to fade from the oil futures price curves." He added, "The market senses some de-escalation in the short term, and perhaps more talks are forthcoming."