President Trump said the war is ending "very soon," and the IEA and the US are releasing 572 million barrels of oil reserves.
So, why are oil prices nearing $100/barrel again?
In the lead-up to Sunday night's historic $30+ rally in oil prices to $120/barrel, uncertainty was at record highs.
The reason behind this rally was largely that President Trump was not signaling how long the Iran war would last.
Since then, the ONLY factor that has changed is that President Trump has said the war will be over "pretty quickly."
However, this also implies that military action will likely continue until at least the end of March.
Meanwhile, as Iran calls for oil prices to rise toward $200/barrel, storage is filling up in Gulf countries and nearly 20 million barrels of daily supply remain off the market.
On top of this, restarting oil production in the Gulf will not be simple. The path to restoring full output is now expected to take months.
At its core, the only material difference between now and Monday is President Trump's reassurance that the war will not last "forever."
We expect more comments like this from the Trump Administration as oil prices near $100/barrel. This would mirror the strategy used during the trade war, when hints of a "trade deal" often emerged as market volatility reached unsustainable levels.
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