The global oil market saw a sharp decline today when reports emerged of a secret “14-point memorandum” between President Donald Trump and Iran. Brent crude, which had been hovering above $114 for the past few weeks, fell more than 10% today to $97.97.
1. A Memorandum that could change the world
According to market reports, Washington and Tehran are negotiating a deal that could not only prevent war but also fully open the Strait of Hormuz—through which 20% of the world’s oil passes. Trump tweeted this morning, “Everything is possible. A great deal for the world is coming.”
This statement created panic among traders, leading to a “sell-off”.
2. Strait of Hormuz: Iran’s new “Service Center” claim
While there are talks of a peace deal, Iran’s Ports and Maritime Organization has issued a strange advisory. Iran has said it is ready to provide “technical and medical support” to ships stranded in the Strait of Hormuz. Experts see this as a strategy by Iran to maintain its control (tollbooth system) over this waterway.
3. “Grand Theft Oil”: Is this insider trading?
Renowned economist Paul Krugman raised a serious question today. He says that major hedge funds took “short positions” well before Trump’s announcements. Was this just a coincidence or part of a larger “market manipulation”? This could be investigated in the coming days.
4. Global Economy and the Threat of Inflation
Although prices have fallen today, the market is still “volatile”.
- Brent Crude: $101.27 (Down 7.8%)
- WTI: $95.08 (Down 7%)
- Risk:If this deal fails, analysts believe that oil could go up to $150, which would cause a global recession.