With one sentence, he caused oil prices to plummet $17 in an instant, the cost being that he wagered...

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Source: Energy Research Center

Market Outlook

On Monday evening at 7:06 PM, oil prices suddenly plummeted, dropping $17 in five minutes, shocking many investors.

The top traders, with less than 48 hours left in their deadline, suddenly announced unilaterally that they would delay military strikes against Iran’s power plants, citing “very good and productive” dialogue with Iran. This news caused oil prices to crash instantly.

However, Iran’s Foreign Ministry later stated that Trump’s remarks were aimed at lowering energy prices and buying time for his military plans. While there are initiatives to cool tensions, our response is that all parties calling for de-escalation should address the United States, as the war was not initiated by Iran. Iranian Foreign Ministry spokesperson Bagheri said on the 23rd that Iran has received messages from some friendly countries regarding US efforts to end the war through negotiations, and Iran has responded appropriately based on its principles. Iran has not held any negotiations with the US. Iran’s stance on the Strait of Hormuz and conditions for ending the war remain unchanged. According to US and Israeli media reports, the US is in dialogue with Iranian Islamic Parliament Speaker Kalibaf, but Kalibaf has denied this. Iranian media reports suggest that the US is spreading false news about negotiations to assassinate Kalibaf and create division within Iran. Further feedback from Iran indicates that Iran claims the US has relayed messages through Egypt and Turkey, but the US has not accepted core conditions such as compensation and acknowledgment of violations. The US has requested a meeting with Kalibaf on Saturday.

Overall, it appears there is indirect contact between the US and Iran, but the US has not accepted Iran’s core conditions. The so-called negotiations’ positive progress on Monday night is likely a Trump-led show aimed at calming the market, possibly to buy time for his next military move (some forces in the Middle East are not yet in position). Regardless, Trump’s actions caught the market off guard. Market participants remain concerned that Trump, driven by his business instincts, might compromise under immense pressure. Previously, due to deep disagreements, the market believed a short-term ceasefire was almost impossible. While nothing is certain yet, as long as doubts persist, Trump’s goal of cooling the market has been achieved—at least temporarily. However, the cost is huge; if it’s later proven that he lied, damaging his and the US’s reputation severely, he might have temporarily lowered oil prices but at the expense of future credibility.

Currently, both sides are still exchanging strikes. The next few days in Middle Eastern markets are critical. If the Strait of Hormuz remains blocked, the situation will become more complicated. According to the latest Kpler data, Middle Eastern oil production cuts have exceeded 10 million barrels per day, with further reductions expected by the end of March, supporting upward pressure on oil prices. If Trump’s move is indeed a strategic deception, as Iran’s Foreign Ministry suggests, aiming to buy time for military plans, then escalation could push oil prices higher again.

Trump’s remarks have undoubtedly caused market chaos. If he has indeed yielded under pressure, oil prices might peak and then fluctuate back below $80. Overall, the most likely scenario is that Trump’s statements are a smoke screen. Despite Iran’s repeated denials, oil prices still fell sharply under Trump’s continuous rhetoric. Trump even boasted that the US destroyed much of Iran’s infrastructure, claiming “Iran finds it hard to get information.” This event again shows the influence of media control. Whether the Strait of Hormuz can gradually reopen and whether Middle Eastern oil supplies will be interrupted in the coming days are key. Currently, it’s not advisable to short oil; prices are unlikely to fall sharply now. Expect continued high volatility. Be cautious and strategic in participation.

Daily Updates

1. WTI crude futures fell $10.1, down 10.28%, to $88.13/barrel; Brent crude futures fell $10.49, down 9.86%, to $95.92/barrel; INE crude futures dropped 7.81%, to 742.2 yuan.

2. US dollar index down 0.36%, at 99.15; Hong Kong Exchange USD/CNY up 0.22%, at 6.8707; US 10-year Treasury yield up 0.25%, at 110.81; Dow Jones Industrial Average up 1.38%, at 46,208.47.

Recent News

1. Trump dismisses Iran’s denial, claims perfect dialogue

On March 23, US President Trump told the media that the US had engaged in “strong” talks with Iran, describing the dialogue as “perfect,” with an agreement in principle that could end the conflict if all goes well. However, Iran has repeatedly denied any talks with the US. Trump claimed the US destroyed much of Iran’s infrastructure, making it hard for Iran to get information. He said the US had been in contact with Iran’s leadership, “including one of the most respected leaders we believe.” When asked if the negotiations involved Iran’s Supreme Leader Khamenei, Trump said “no.” Trump also claimed that Iran initiated the call out of concern that US military strikes might target power plants. When asked who might control oil in the future, he said he and “the next Supreme Leader of Iran” might jointly control it. US and Israeli media reports suggest the US is in dialogue with Iranian Parliament Speaker Kalibaf, but Kalibaf has denied this. Iranian media reports indicate that the US is spreading false news about negotiations to assassinate Kalibaf and create internal divisions. (CCTV International)

2. Israeli media reports US considering ground operation to seize Iran’s Halek Island

According to the Jerusalem Post on March 23, US officials recently informed Israel and other countries that “they may have no choice” but to launch a ground military operation against Iran’s Halek Island. The report cites two sources saying the US is accelerating deployment of thousands of Marines and naval personnel to the Middle East. This includes the amphibious assault ships “America” and “Portland,” and the dock landing ship “Kongstown,” carrying about 4,500 Marines and other forces. Trump threatened on March 15 that the US is ready to strike Halek Island again and may target Iran’s oil infrastructure further. Iran’s Tasnim News Agency on March 21 quoted military sources saying that if the US attacks Halek Island, Iran will respond with “unprecedented counterattacks” against US and Israeli targets. Halek Island is located northwest of the Persian Gulf, about 25 km from Iran’s coast, roughly 6 km long and 3 km wide, and is Iran’s largest oil export hub, with 90% of Iran’s oil exported from there. (Xinhua)

3. US gasoline prices surge, impacting livelihoods; Trump’s approval drops to 35%

(1) Rising fuel prices impact household finances: Recent polls show about 55% of respondents say higher gasoline prices have “somewhat” affected their finances, with 21% saying “significantly.” Since the US and Israel attacked Iran on February 28, US gasoline prices have surged nearly $1 per gallon.

(2) Nearly 90% expect further price increases: About 87% of Americans believe gasoline prices are likely to continue rising in the next month. The survey also indicates most Americans expect the US to send troops to Iran for large-scale ground operations, though support for such actions is limited.

(3) Cost of living becomes key issue in midterms; Trump’s approval declines: Rising prices may weaken Republican chances of maintaining a slim majority in Congress. About 63% of Americans disapprove of Trump’s handling of living costs, with his approval at only 29%, down from 35% early in his presidency. Only 35% believe he manages the economy well.

(4) IEA: Energy crisis triggered by Iran conflict worse than 1970s oil shocks and post-Ukrainian conflict price surges combined. The current crisis is equivalent to two oil crises and one natural gas collapse. The global economy faces major threats; a quick resolution is needed. If the crisis worsens, no country will be immune, requiring global cooperation.

[IEA: Over 40 energy assets in the Middle East severely damaged, supply chain disruptions may extend]

• IEA Executive Director Fattouh said over 40 energy assets across nine Middle Eastern countries have been “severely or very severely” damaged during the conflict, potentially prolonging global supply disruptions after the conflict ends.

• He also noted that not only oil and natural gas but also key economic arteries like petrochemicals, fertilizers, sulfur, and helium trade have been interrupted, which could have serious global economic consequences.