President Donald Trump issued an ultimatum, declaring that if the Strait of Hormuz is not reopened within 48 hours, he will obliterate Iran’s power plants. Despite this threat, international oil prices have slightly decreased.
This unexpected drop occurred because Trump lifted sanctions on Iranian oil to address global supply shortages, effectively giving with one hand while taking with the other.
As of 7:50 p.m. on March 22, West Texas Intermediate (WTI) crude futures traded at 98.02 USD per barrel on the New York Mercantile Exchange, down 0.21%.
Brent crude futures also fell by 0.38%, reaching 111.76 USD per barrel.
On March 21, Trump threatened that if Tehran fails to fully reopen the Strait of Hormuz within 48 hours, he will completely destroy Iran’s power plants.
In response, Mohammad Baqer Qalibaf, the Speaker of Iran’s Parliament, warned that an attack on Iran’s power plants could lead to irreversible destruction of critical infrastructure and energy facilities across the Middle East.
He specifically mentioned the possibility of retaliatory strikes on desalination facilities in Saudi Arabia and the United Arab Emirates.
As a result, analysts had anticipated a sharp rise in oil prices.
However, on March 22, the U.S. administration temporarily lifted sanctions on Iranian oil exports to alleviate global supply shortages.
Following this announcement, countries like India signaled plans to resume purchasing Iranian oil, which appears to have contributed to the slight decline in international oil prices.