Iran war “effectively over”?: Oil price falls below $90 after Trump announcement

The US President has often announced an imminent end to the Iran war. But so far this has not happened. That could be different after the US midterms. The global oil price is reacting to Trump's recent statements and is falling.

The price of oil has fallen below $90 a barrel for the first time since August on hopes of an end to the Iran war. Around midday, a barrel (159 liters) of the reference Brent variety from the North Sea for delivery in January cost 89.92 US dollars, a loss of 2.9 percent.

The reason for this is hopes for an end to the war between the USA and Iran. This time the impetus for this came from the White House: President Donald Trump has declared the military conflict with Iran to be "effectively over." “We are maintaining the status quo, and we are doing so at the insistence of neighboring countries,” Trump said after a meeting with Qatari Prime Minister Mohammed bin Abdulrahman Al Thani.

Confidence about an end to the military conflict has grown since the US midterm elections at the beginning of last week. Democrats in Congress are currently considering using the December 11 deadline for a government shutdown to pressure Trump to end the war. He is under pressure after the Republicans' defeat in the congressional elections.

As oil prices fall, the pressure on drivers, who were still suffering from record prices at German gas stations in September, is also decreasing. According to the ADAC, premium gasoline of the E10 variety has been costing less than 2 euros per liter on a nationwide daily average for a few days now. Especially in the mornings, when the price is usually lower, there are also numerous offers for less than 1.90. Diesel also became cheaper, although less so.

E10 is cheaper than it has been for a long time

According to the ADAC, a liter of E10 cost 1,991 euros on a nationwide daily average on Monday. That was the lowest value since July 1st. A liter of diesel cost 2,236 euros. However, the recent price declines are unlikely to be fully reflected in these prices. Current figures from the fuel price portal Tankerkönig also indicated further falling fuel prices this morning.

However, it is still unclear whether the more moderate rhetoric will lead to tangible progress in ending the war triggered by the US and Israel. On the one hand, political uncertainty has increased after Israeli Prime Minister Benjamin Netanyahu lost his parliamentary majority. Instead, the leader of the centrist Jashar party, Gadi Eisenkot, is now expected to form a coalition.

On the other hand, the Iran war still has significant and direct effects on the entire Gulf region. According to the Energy Ministry, the important east-west oil pipeline in Saudi Arabia has once again become the target of an attack. Through this, large quantities of crude oil are transported from the Persian Gulf to the Red Sea, bypassing the Strait of Hormuz, which is still effectively blocked.