Oil Falls 2% as Trump Says U.S. Will Exit Iran 'Pretty Quickly'

• Oil prices on Wednesday morning dipped about 2% as U.S. President Donald Trump signalled that the United States may wind down its military operations in Iran soon, while threatening to quit NATO for its lack of support in the Middle East operation.
• Iran announced the previous day that it was ready to reach a resolution or intensify attacks on U.S. assets and its allies, without offering more details on how this would be achieved. Two Pakistani sources told Reuters that neither side had responded to Islamabad's proposal for a temporary ceasefire.
• Oil prices eased in Wednesday’s session on hopes of quick de-escalation. Brent crude for May delivery was down 1.9% to $102.01/bbl. Prices remain more than 40% above late February levels when the war broke out.
• Further, illustrating the ⁠impact of the closure of the Strait of Hormuz, crude oil ‌output from the Organisation of the Petroleum Exporting Countries (OPEC) dropped by 7.5 Mn barrels per day in March from the previous month, as producers were forced to cut output because storage is full. According to the International Energy Agency (IEA) head, Fatih Birol, oil supply disruptions from the Middle East will increase in April and will hit Europe as the closure of the Strait of Hormuz hits exports further.
• Analysts expect that energy flows through the Strait of Hormuz would be slow to return to levels before the conflict, even if a ceasefire is announced. "Even if the Strait reopens, clearing the vessel backlog would take time, with production, exports and LNG flows normalising only gradually rather than immediately," ING said.

(Source: Reuters)