This archive report was first published on 9 January 2020.
January 8, 2020, marked a dramatic shift in the global oil market as prices plummeted following Iranian missile attacks on US targets in Iraq. The sudden drop was a reversal of an earlier brief spike, fueled by concerns over the escalating conflict.
However, as Iranian officials and US President Donald Trump eased tensions, crude prices began to fall, and by late European trading, they had plummeted even further.
The strikes, launched in retaliation for the assassination of Iran's top general, sent Brent and WTI prices to multi-month peaks before profit-taking prevailed. Iran stated that it had 'concluded' its missile attacks for now, and observers noted that they seemed carefully calibrated to avoid US casualties.
Trump told a news conference, "Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world." Iranian Foreign Minister Mohammad Javad Zarif had tweeted earlier that the country does 'not seek escalation or war.'
Analysts pointed out that oil traders had multiple sources at their disposal, and SEB analyst Bjarne Schieldrop added that 'not a single drop of oil supply has been lost due to the recent incidents and this is why the oil price has fallen back down again so quickly.'
The drop in prices was also attributed to a weekly US oil supply report showing higher inventories. Global stock markets initially slid on investor concern over the US-Iran clash, but European bourses mostly finished higher as anxiety over the situation ebbed.
Wall Street stocks rallied after Trump's late morning statement, with all three major indices ending solidly higher, including the Nasdaq, which reached a record.
