Oil declines as Trump rules out new attacks on Iran

Oil prices fell at the beginning of trading on Monday, after US President Donald Trump said that the possibility of issuing orders to launch new attacks on Iran was very unlikely, at a time when negotiations aimed at ending the conflict had made progress, despite both sides announcing attacks on ships in or near the Strait of Hormuz.

Brent crude futures fell 84 cents, or 0.85 percent, to $97.48 per barrel by 01:38 GMT, while US West Texas Intermediate crude fell 32 cents, or 0.35 percent, to $90.51.

These movements reflected limited gains recorded by prices upon settlement of trading on Friday, after investors evaluated the possibilities of the United States launching new strikes on Iran. Brent crude fell by about 17 percent during the past week, in the largest weekly decline since the beginning of the “Covid-19” pandemic, and the largest decline in absolute value since the start of the London Stock Exchange Group’s data in 1988.

“It depends on whether they sign a very strong agreement,” Trump said in a phone interview with CNN in response to a question about the possibility of renewed attacks, adding, “The answer is that it will most likely not be necessary.”

Trump had hinted at the possibility of resuming attacks on Iran after the US midterm elections last week, but no indications have yet emerged of the implementation of a large-scale US military operation. On the other hand, Iran said it would respond by targeting American and Israeli sites.

Tim Waterer, senior analyst at KCM Trade, described Trump's statements as "more balanced," but noted that markets are still waiting to find out whether the midterm elections have brought about a sustainable shift in Trump's approach to the conflict, or whether the matter is nothing more than a temporary change in the tone of his statements.

In a development related to market fundamentals, the JPMorgan group said in a report issued on Friday that the oil market is once again heading toward recording a surplus in supply, with the recovery of oil flows from the Middle East, increased production in other countries, and weak demand, which are factors that pushed global supplies to exceed consumption. The group estimated the surplus at about 1.1 million barrels per day in September, likely to expand to 1.4 million barrels per day in October.

In Iraq, Foreign Minister Fuad Hussein said that Baghdad had reached an understanding with the United States that allows Iraqi oil exports to pass through the Strait of Hormuz, through a navigation route near the Sultanate of Oman. He added that Iraq's losses resulting from the war with Iran and the disturbances affecting oil exports amounted to $60 billion.

The Gulf Cooperation Council countries signed the general agreement for the railway connection project, in a step that enhances the path of implementing a network extending about 2,117 kilometers, linking the six countries, with the aim of completing its operation in December 2030.

The signing in Manama comes amid navigational disturbances in the Strait of Hormuz, and the challenges it poses to trade movement and supply chains, highlighting the importance of diversifying transportation options and enhancing Gulf logistical integration.

The Bahraini Minister of Transportation and Communications, Sheikh Abdullah bin Ahmed Al Khalifa, told Asharq Al-Awsat that each country will finance and implement the part located within its territory, indicating that there are no prior agreements with international partners to finance or implement the project, with the possibility of seeking the expertise of international companies according to the needs of each country.

For his part, the Secretary-General of the Gulf Cooperation Council, Jassem Al-Budaiwi, announced that the completion rate in the project reached 55.9 percent.

The project aims to transport about 6 million passengers and 200 million tons of goods by 2030, with the capacity to rise to more than 8 million passengers and 271 million tons by 2045.