Trump’s trade war that’s been lasting for quite some time, lead to an increase in oil prices. However, the US government decided to send warships to the Middle East, which can be a sign of potential conflict with Iran. Traders are trying to balance the seesawing oil market at the beginning of May 2019.
What is the Purpose of the US-Iran Conflict?
John Bolton, a US national security adviser, said that the purpose of sending a bomber task force and a carrier strike is to warn Iran. He also stated that this warning is issued to prevent Iran from attacking US interests. If that happens, the US bombers will use “unrelenting force.”
As stated, the decision to send warships in the Middle East should not be viewed as malicious. It’s only their way of keeping Iran out of the government’s interests.
Stock Market News – The Oil Price Surge
The surges that transpired during 2019 were a matter of supplies. OPEC+ holds 2.2 million barrels per day offline and it’s something that’s causing outages in Venezuela and Iran, as said by Bank of America Merrill Lynch. For example, Iran’s exports fell from a steady 2.5mn b/d to just 600k b/d. The sanction waivers expire in May 2019 and at this point, the higher pressure on Iran’s exports is expected.
This means that the volumes could fall to even less than 500k b/d in the second half of 2019, and could even reach zero. Of course, this depends on the buyers’ awareness of sanctions.
How Will Trump Influence The Price of Oil?
Trump ramped up the trade war with China at exactly the same time the conflict with Iran escalated. The possibility of further conflicts in the Middle East could drastically increase the prices, especially since the trade war is waged with China. But, as it stands in the first quarter of 2019, Trump manages to keep both oil prices and Iran conflict in control.
The prices might not surge but the global economic stability could be violated to some extent. Source: Oilprice