Oil prices slid on Friday as remarks by Donald Trump on Iran and China’s resumption of refined-fuel exports eased fears of supply disruptions in the Middle East.
Brent crude fell 0.5 percent to $103.76 a barrel, while US West Texas Intermediate dropped 0.2 percent to $91.28. The decline came as traders reassessed the risk premium built into prices after months of tension around the Strait of Hormuz.
What calmed the market
Trump’s comments on talks with Iran suggested the immediate risk of escalation had receded, while the restart of Chinese refined-fuel exports added product supply to a market that had been braced for shortages.
The two developments together took pressure off a market that has been pricing in the possibility of further disruptions to tanker traffic and refinery output. Crude had been elevated for weeks on concerns that the Iran conflict could widen and choke off energy flows through the Strait of Hormuz, the world’s most important oil transit chokepoint.
What it means for Pakistan
Lower oil prices are good news for Pakistan’s import bill and for inflation, since petroleum products feed directly into transport costs and the prices of almost everything moved by road. The government reviews fuel prices every fortnight, and sustained weakness in crude would create room for relief at the pump.
The latest fortnightly revision for the second half of October saw petrol cut by 66 paisas while diesel moved higher, reflecting the mix of global price moves and the petroleum levy.
Oil prices: a market watching the Gulf
Crude has spent weeks pricing in geopolitical risk. The conflict involving Iran, now in its eighth month, and the effective closure of commercial oil traffic through the Strait of Hormuz had kept a premium in prices as traders weighed the chance of wider disruption. Friday’s move unwinds part of that premium, though not all of it.
Analysts caution that the relief could prove temporary. Talks between the US and Iran have stalled since the June memorandum of understanding, and any fresh escalation around the strait would send prices higher again just as quickly.
Frequently asked questions
How far did oil prices fall?
Brent crude slipped 0.5 percent to $103.76 a barrel and US WTI fell 0.2 percent to $91.28 on Friday.
What drove the decline?
Donald Trump’s remarks on Iran eased geopolitical fears, and China resumed refined-fuel exports, adding supply to the market.
Will petrol prices fall in Pakistan?
Fuel prices are reviewed every fortnight and track global crude plus the levy and taxes. A sustained fall in crude creates room for lower prices, but the exact revision depends on the pricing period’s average.
