Trump’s assurance of no attack on Iran pushes oil lower

• US President says discussions productive
• Brent crude falls 1% to $103
• Shell partially restarts Qatar operations

Oil prices declined on Friday after US President Donald Trump said the country would not attack Iran before next month’s US elections.

Saudi Arabia intensified airstrikes on Houthi strongholds in Yemen, while Riyadh Air and other global airlines temporarily suspended flights to and from King Khalid International Airport on Thursday afternoon, after the Houthis claimed a missile attack on Riyadh airport.

The Saudi government has yet to confirm the report.

In a social media post on Thursday, Trump said the US would not attack Iran before the elections on November 3.

He claimed that 22 million barrels of crude passed through the Strait of Hormuz on Wednesday night, with none coming from or going to Iran, as the US blockade remained in full force.

“We are having productive discussions with the Islamic Republic of Iran. I want to make it clear to everybody that Iran is in very bad condition, both economically and militarily,” he said.

Iranian foreign minister Abbas Araghchi said Tehran would respond within seven days to the US response to its proposal to reopen the Strait of Hormuz, Iran’s Tasnim News Agency reported.

Negotiations remain underway, with messages continuing to pass through intermediaries, he said.

Up to 10 vessels transited the Strait of Hormuz on Wednesday, compared with more than 20 on Sunday and Monday, Reuters reported, citing Kpler data.

UK energy giant Shell has partially restarted operations at its Pearl gas-to-liquids (GTL) facility in Qatar, which was damaged in a missile attack in March, Reuters reported.

Greece-based Marisks began advising shipowners on Wednesday to suspend transits through the Strait of Hormuz amid intensifying Iranian attacks.

“The Iranians have shifted their methodology from identifying specific vessels and trying to hit them to indiscriminately attacking anything that is within the convoy,” Marisks CEO Dimitris Maniatis told AGBI.

Brent crude futures fell nearly 1 percent to $103.3 a barrel by 03:00 GMT. US West Texas Intermediate (WTI) crude futures fell 0.82 percent to $90.74.

Further reading:

• Countries tell citizens to avoid Saudi Arabia after attacks
• Tanker frenzy has brokers chasing deal of a lifetime
• Why Iran gains more from an open, dangerous Hormuz

On Thursday, Brent closed 4 percent higher amid growing attacks on crude vessels in the Middle East.

Houthi spokesperson Yahya Saree said in a social media post that Saudi Arabian warplanes carried out 59 airstrikes and missile attacks on the capital, Sanaa, and other cities, causing deaths and injuries.

He said the total number of Saudi airstrikes and missile attacks since the escalation began had reached 1,857.

Yemen has been divided for more than a decade between areas controlled by the internationally recognised government and those held by the Iran-aligned Houthis, including the capital, Sanaa. The country continues to face economic collapse and widespread poverty.

Most Gulf stock markets ended lower on Thursday.

Saudi Arabia’s benchmark index fell 1.6 percent, its biggest one-day loss since March, and declined for a sixth consecutive day.

The Abu Dhabi stock market fell 1.6 percent, while Dubai’s market gauge dropped 1.7 percent.

Qatar, Bahrain and Kuwait ended the day lower, while Oman closed marginally higher.