A general view of the oil terminal at the port of Kharg Island, 25 km from the Iranian coast in the Persian Gulf and 483 km northwest of the Strait of Hormuz, Iran, March 12, 2017.
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Oil prices seesaw in volatile trade Tuesday as traders assess president Donald Trump» reported statements on the end of the war in Iran.
Trump told aides he was prepared to end U.S. operations against Iran even if the Strait of Hormuz remained closed because forcing Tehran to reopen the oil chokepoint could prolong the conflict, the Wall Street Journal reported in the United States on Monday.
THE West Texas Intermediate Futures contracts for May delivery were up 0.03% at $102.9 a barrel as of 2:06 a.m. ET. May futures for Brent crude rose 0.3% to $113.2 a barrel, after erasing declines.
“The president’s appetite for a large-scale and extensive saturation bombing of Iran is quite small,” Matt Gertken, chief geopolitical strategist at BCA Research, told CNBC’s “Squawk Box Asia” on Tuesday, describing Trump’s recent threats as an attempt to “back down and make a deal.”
“[Trump] requires, at a minimum, highly enriched uranium. It is [something] the Iranians might actually keep their promises and get regime survival in return,” Gertken said, adding that there is no chance the United States would carry out a full-scale ground invasion.
“But if we don’t get this within two weeks, [Trump] we will have to intensify… target the core [Iranian] elements of the regime, and this will lead to greater collateral damage. »
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Trump had previously threatened to expand attacks on Iran’s civilian energy infrastructure, including water desalination plants, if Tehran failed to reopen the Strait of Hormuz.
Trump said Monday that if Tehran does not reopen the Strait of Hormuz and agree to a peace deal to end the war, “we will conclude our beautiful ‘stay’ in Iran by blowing up and completely destroying” power plants, oil facilities and “eventually” desalination infrastructure. according to an article from Truth Social.
The war in Iran has entered its fifth week with hostilities escalating across the region. Tehran hit a fully loaded Kuwaiti tanker in the anchorage area of Dubai Port earlier on Tuesday.
“Relevant authorities in Dubai have confirmed the success of teams in extinguishing the fire that struck a Kuwaiti oil tanker,” according to a statement. social media post from the Dubai government.
The incident indicates a further strengthening of the Islamic Republic’s grip on the Strait of Hormuz, targeting oil tankers just outside the waterway, said Ben Emons, CIO at Fed Watch Advisors, highlighting renewed risks of further disruptions to energy flows.
“The result is a more asymmetric game, with the United States inclined toward exit and Iran still incentivized to impose costs,” Emons said.
Trump has regularly vacillated between hailing negotiations with Iran as productive and warning that he is prepared to send more military forces to the region.
He told reporters on Monday that Tehran had accepted “most” of the 15-point ceasefire proposal put forward by the United States, while Tehran had publicly rejected the terms and responded with its own conditions, including maintaining control over the Strait of Hormuz.
Trump also reportedly considered the possibility of sending ground forces to seize Kharg Island, a major oil hub that facilitates 90% of Iran’s crude exports.
Maritime traffic using the Hormuz waterway, which typically carried a fifth of the world’s oil shipments by sea before the conflict, has been virtually halted since the war began on February 28.
Experts warn that a possible land operation to seize Kharg Island could risk increasing U.S. casualties and lengthening the cost and duration of the war.
