Price of Brent crude was down to open Thursday after U.S. President Donald Trump hinted the possibility that Washington could ease sanctions on Iran, which would increase crude exports from the country and raise oversupply in the oil market.
The international benchmark plummeted 2.2% on Wednesday to close at $61.02 per barrel, and it was trading slightly unchanged at $61.16 a barrel at 0610 GMT.
American benchmark West Texas Intermediate slumped 2.1% to end the previous day at $56.20 a barrel and was at $56.13 per barrel at the same time.
After firing his national security advisor, John Bolton, on Tuesday, Trump dialed down from his "maximum pressure" campaign on Tehran and hinted that Washington and Tehran could start nuclear negotiations.
"I do believe they’d like to make a deal. If they do, that’s great; and if they don’t, that’s great too. But they have tremendous financial difficulty, and the sanctions are getting tougher and tougher," he said.
After withdrawing the U.S. from Iran nuclear deal in May 2018, the Trump administration reimposed sanctions on Iran in November 2018, which greatly hurt Tehran's capacity to export crude oil.
“We’ll see what happens,” Trump said when he was asked about whether he would ease the sanctions on Iran.
If sanctions on the Tehran government would be removed, this would increase the crude oil exports of Iran and raise the glut of supply in the global oil market to push crude prices lower, experts said.
Experts also pointed out that Bolton leaving the U.S. administration and Trump hinting to begin negotiations with Iran came days after China was reported to pledge $400 billion investment on Iranian oil, natural gas, petrochemical and industrial sectors.
By Ovunc Kutlu