Crude oil prices began the week with a decline, after President Trump signaled he had no immediate plans for further attacks on Iran. The decline comes despite fresh reports of attacks on tankers in the Strait of Hormuz and new strikes by the Yemeni Houthis on Saudi targets.

At the time of writing, Brent crude was trading at $98.28 per barrel, with West Texas Intermediate at $91.24 per barrel, both higher from the opening of trade in Asia but lower than last Monday.

“It depends on whether or not they sign a very strong agreement,” Trump told CNN in an interview on Sunday. “The answer is, highly unlikely it’s going to be necessary.” The U.S. president further elaborated that “They’re a failing nation. It just came out, you saw this year, 301% inflation. Highly unlikely it will be necessary. I would if necessary, but we hit them really hard. I hit them so hard. You don’t know how hard I hit them.”

It seems, then, that new U.S. attacks on Iran are not off the table but are not imminent right now, which has driven oil prices lower. For how long, however, it remains to be seen as traders await any signals of a major policy shift following the midterms.

“Tthe market ‌is still waiting to see whether the midterms have produced a lasting shift in Trump’s approach to the conflict, or whether this is just another temporary change in tone,” KCM Trade’s chief analyst Tim Waterer said, as quoted by Reuters.

At the end of last week, Saxo Bank’s Ole Hansen noted that “The prospect of an end to the conflict, combined with recovering Middle East crude flows, raised hopes that the extraordinary supply disruptions and elevated energy prices seen this year could gradually unwind.” That followed a 13% loss for both Brent crude and WTI last week after the Democrats’ victory in the midterms.

Yet reports about new attacks on tankers in the Strait of Hormuz suggest the end of the conflict may still be away. The latest from that front was a report from Iran’s Islamic Revolutionary Guard Corps that three tankers were on fire in Hormuz on Sunday.

By Irina Slav for Oilprice.com

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