Oil slides over 4% as Trump signals Iran talks, easing supply shock fears

Core Viewpoint - Oil prices are experiencing volatility due to geopolitical tensions between the U.S. and Iran, with recent military threats and diplomatic communications influencing market sentiment [1][3][4]. Group 1: Oil Price Movements - Oil prices rose more than 1.5% in Asian trade amid concerns of a potential U.S. military attack on Iran, which could disrupt supply from the region [1]. - Recently, oil prices reached a six-month high due to fears of a military strike against Iran, with Brent crude falling as much as 6.4% to $66.15 per barrel [3]. - The U.S. West Texas Intermediate futures also saw a decline of 4.75% to $62.11 per barrel [3]. Group 2: Geopolitical Context - President Trump has warned Iran of possible intervention if it does not reach a nuclear deal or continues to suppress domestic protests, which Iran claims are influenced by Western powers [2]. - Diplomatic communications between Washington and Tehran are ongoing, raising hopes for de-escalation of tensions [4]. - The U.S. administration's sensitivity to rising oil prices could prevent further escalation, especially with midterm elections approaching [5]. Group 3: Supply Dynamics - Additional supply from Venezuela is entering the market, contributing to available oil barrels despite global production exceeding demand [6]. - OPEC+ has decided to maintain current production levels, extending a three-month supply freeze, which is expected to support oil prices [7].