Brent crude oil prices extended their decline on Thursday, sliding to $88 per barrel—the lowest level since April 17—as President Donald Trump delivered contradictory signals regarding U.S. military action against Iran and the status of a potential nuclear agreement. The benchmark has now fallen 25% from its 2025 peak, reflecting heightened uncertainty in energy markets.
Mixed Messages from the White House
In a series of statements, Trump first threatened major strikes against Iran, including a potential assault on Kharg Island, which handles over 90% of Iran's oil exports. Such an operation would represent a significant escalation, exposing U.S. forces to retaliatory attacks and risking a broader regional conflict. Iran possesses multiple retaliatory options, including strikes on energy infrastructure in Saudi Arabia, Qatar, Kuwait, and Bahrain, as well as disrupting Red Sea shipping lanes—through which more than 12% of global seaborne crude oil transits—either directly or via Houthi proxies.
Hours later, Trump reversed course, announcing that the U.S. had reached a final agreement with Iran following negotiations involving Saudi Arabia, Israel, and Pakistan. He stated the deal would be signed in Europe as early as next week. However, similar promises have been made before without materializing, raising skepticism among traders. The stock market reflected the whipsaw: the Dow Jones Industrial Average initially plunged on the war threat, then surged 1,000 points after the deal announcement, while the Nasdaq 100 added over 640 points.
Trump disclosed that he personally executed over 3,500 trades in the first quarter, suggesting his market-moving statements may be strategically timed. Meanwhile, Israeli Prime Minister Benjamin Netanyahu has maintained that military operations in Lebanon will continue, and Iran has conditioned any deal on a ceasefire there. Iranian officials have publicly denied Trump's claims of a breakthrough.
Technical Outlook Points Lower
From a technical perspective, Brent crude's daily chart shows the price has broken below the 50-day exponential moving average (EMA), a bearish signal. The Relative Strength Index (RSI) has fallen from overbought levels above 90 in March to 37, its lowest since January, indicating further downside momentum. A large downside gap on May 22 adds to the bearish picture.
The most probable scenario is continued weakness toward the psychological $80 level. However, any renewed escalation in hostilities—as seen earlier this week—could quickly reverse the trend and drive prices higher. Investors should monitor developments closely, as the situation remains highly fluid.
For broader context on how geopolitical tensions are impacting other assets, see our coverage of Anthropic's IPO plans amid Iran strikes and the Evening Digest on Trump's Hormuz fee reversal.
This article is for informational purposes only and does not constitute financial advice.
