President Trump said Saturday he expects the Iran war to end shortly after November's midterm elections and predicted oil prices would fall once it does. Brent and WTI posted sharp weekly gains even as they pulled back Friday, while Houthi fighters seized Yemen's Red Sea coastline and a drone attack shut down Saudi Arabia's key East-West pipeline.
Trump told reporters in Dublin he expects the war with Iran to end soon after the midterms, predicting oil prices would then fall sharply. According to CNBC: "I think very soon, I think it'll be right after the mid-terms, actually", he said, adding that oil would come tumbling down once the war ends.
Oil retreats but posts weekly gains
Brent crude settled down 2.8% at $104.61 a barrel on Friday, while WTI fell 2.4% to $100.05. Both benchmarks still notched sharp weekly gains after Brent peaked at around $108 a barrel on Thursday, with WTI hitting more than $104. The pullback followed news that Iranian state media said Tehran will meet Gulf states in Oman to discuss the Strait of Hormuz.
Iranian and Gulf officials are due to sign an agreement in Muscat on Monday establishing an Iran-Oman shipping route through the strait. Still, Iranian President Masoud Pezeshkian said Tehran will not surrender, telling a gathering of Indian religious leaders in New Delhi that Iran has resisted aggression from the U.S. and Israel.
Saudi pipeline attack and Yemen offensive
Trump said Saturday he believes Iran was likely responsible for attacks on Saudi Arabia's East-West crude pipeline, a 7-million-barrel-per-day artery that lets Riyadh route exports to the Red Sea and bypass the Strait of Hormuz. Drones launched from Iraq struck the pipeline in the Riyadh and Medina regions on Thursday, causing fires and injuries, prompting Saudi Arabia to shut the line down as a precaution.
Meanwhile, Houthi fighters completed a week-long offensive that gave them control of Yemen's Red Sea coastline, including positions near the Bab el-Mandeb Strait, after seizing the port city of Mokha. The offensive has killed more than 500 people and displaced about 46,000, according to the UN's migration agency. Yemeni government forces struck back at Houthi fighters and vehicles around Mokha on Saturday.
Trump said the Houthis have been in contact with his administration and don't want to fight U.S. forces. Traffic through Hormuz remains heavily constrained, with the U.S. narrowing military-protected sailing windows for tankers to two daily slots after Iran intensified attacks on vessels transiting at night.
India presses for diplomacy at BRICS
The conflict has hit India hard, since the country imports nearly 85% of its fuel needs through the Strait of Hormuz corridor. Meeting Pezeshkian on the sidelines of the BRICS summit in New Delhi, Prime Minister Narendra Modi raised concerns about the safety of seafarers and urged a resolution through dialogue and diplomacy.
BRICS member states, including Iran, Saudi Arabia and the UAE, adopted a joint declaration condemning unilateral wars without naming any country, after negotiators worked through the night to bridge divisions between Iran and the UAE. The economic fallout is widening beyond the region: China raised retail gasoline and diesel prices on Saturday, citing higher international crude costs linked to the conflict.
Sources: CNBC, CNBC, Investing.com
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