Oil Tumbles After Trump Pauses Iran Strikes, Lauds Talks


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil prices plunged Monday (3/23) morning after U.S. 
President Donald Trump said that the U.S. and Iran were in negotiations to 
resolve their ongoing conflict diplomatically, and that he had ordered the 
postponement of attacks on Iranian energy infrastructure.

   Just hours before the 48-hour deadline Trump gave Iran to reopen the Strait 
of Hormuz or face attacks on power plants, the president in a social media post 
said the U.S. and Iran have been in negotiations over the past two days about a 
"complete and total resolution to hostilities in the Middle East". He added 
that he had instructed the Department of Defense to halt strikes on power 
plants and energy infrastructure for a five-day period, "subject to the success 
of the ongoing meetings and discussions".

   Iranian news agencies Fars and Tasnim both denied that any talks were 
ongoing, and said that the U.S. President backed down due to Iranian threats of 
counterattacks on energy infrastructure in the region.

   Israel's military, ally to the U.S. in the operation against Iran, also said 
it was continuing with strikes in the heart of Tehran.

   Iran has stepped up attacks on neighboring energy installations since 
airstrike on its largest natural gas field by Israel last Wednesday.

   The International Energy Agency said that more than 40 energy assets across 
nine countries in the Middle East have been severely damaged by the war.

   Near 08:00am ET, front-month crude benchmarks WTI and Brent were down 5.8% 
on the day. NYMEX WTI futures for May delivery fell $5.66 to $92.57 bbl, after 
hitting a low of $84.37 bbl earlier on Monday following the president's 
remarks. ICE Brent for May delivery slid $6.51 to $105.68 bbl, following an 
intra-day low of $96 bbl.

   ULSD futures for April delivery shed $0.0946, or 2%, to trade near $4.5138 
gallon, and front-month RBOB futures retreated $0.1253, or 3.8%, to $3.1609 
gallon.

   The US dollar index softened by 0.16 points to 99.3 against a basket of 
foreign currencies.

    




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