WTI Plunges 4% as Risk Premium Evaporates on Trump's Iran De-escalation Comments

Global energy markets witnessed a sharp correction on Wednesday, with WTI and Brent crude tumbling approximately 4% after US President Donald Trump signaled a pause in the escalating conflict with Tehran.

“Stand Down” Signal Crashes the Rally

Oil prices, buoyed by fears of supply disruptions in the Strait of Hormuz, reversed course immediately after Trump confirmed assurances that Iran would halt hostilities. This prompted a rapid unwinding of long positions, though the President warned he would be “very unhappy” if intelligence regarding the de-escalation proved false.

Geopolitical Friction Points Remain

While the immediate threat of a US-Iran kinetic conflict has receded, the broader landscape remains fraught with risk:

• Venezuela: The US military presence near Caracas continues to generate regional instability.
• Arctic Tensions: Diplomatic rows between the US and Denmark over Greenland have intensified.

Market Outlook & Technicals

• Technically, WTI is testing critical support around $60.00.
• Fundamental pressures include a surprise 9 million barrel build in US gasoline inventories.