Oil Markets React to Trump Decision

Wednesday, 9 May 2018 5:46

By: DailyForex.com

After plummeting over 2 percent during Tuesday’s New York trading session, oil prices were broadly higher on Wednesday morning, supported by supply concerns after U.S. President Donald Trump announced that he would withdraw from the Iran nuclear deal (JCPOA). U.S. WTI futures were up above $70 per barrel after hovering below all day Tuesday, to trade at $70.62 per barrel as of 12:55 p.m. HK/SIN, a 2.26 percent jump. Brent crude futures were up 2.43 percent to $76.67 per barrel.

Iran is the third-biggest oil producer in OPEC, the Organization of Petroleum Exporting Countries. Until now, Iran was producing 4 percent of the world’s oil, or about 3.8 million barrels per day. Washington has said that it will impose other sanctions on Iran above oil sanctions, including sanctions on its financial sector.

World Leaders React

European leaders were openly distraught by Trump’s announcement. French President Emmanuel Macron, who tried to deter Trump’s withdrawal in a meeting last month, commented on behalf of several European countries by tweeting that “France, Germany and the U.K. regret the U.S. decision to leave the JCPOA. The nuclear non-proliferation regime is at stake.” Macron, together with U.K. Prime Minister Theresa May and German Chancellor Angela Merkel, called upon all parties to fully comply with the terms of the deal, despite the U.S. withdrawal. Iranian President Hassan Rouhani has said that for now the Islamic Republic would remain committed to the deal and would be open to new negotiations. “If we can guarantee our interests, we can save the JCPOA,” Rouhani said in a statement.

Supporters of Trump’s decision include the U.S.’s strategic political allies Saudi Arabia and Israel, both of which were quick to praise Trump for his actions. “Khalid bin Salam, the brother of the Saudi Crown Prince, tweeted that “The Kingdom of Saudi Arabia fully supports the measures taken by @POTUS with regards to JCPOA.” Israeli Prime Minister Benjamin Netanyahu, a longtime opponent of the Iran nuclear deal, also voiced support of Trump, while calling up additional reserve troops to handle the potential security concerns that are expected to come from increased political unrest in the Middle East as a result of Trump’s decision.

Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.

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