Brent: Volatile spike and policy response – Commerzbank

Commerzbank analysts describe a dramatic surge in Brent oil toward USD120 before prices eased after President Trump signalled the Iran war could be resolved soon. They highlight G7 readiness to support global energy supply and note that Brent still closed higher on the day, with policy options including stockpile releases and possible US Treasury involvement in oil futures.

Oil shock, Trump comments and G7 stance

"The main theme overnight was the roller-coaster ride in oil prices and market sentiment fluctuated along with it. Brent crude oil prices spiked 28% to just under USD120 in early Asian hours. It was the highest level since March 2022, the start of the Russia-Ukraine war."

"In a press conference later in the day, President Trump said he plans to waive oil-related sanctions, have the US Navy escort tankers through the Strait of Hormuz, and predicted that the war would be resolved “very soon”. He said he did not believe the conflict would be over this week but insisted the operation was ahead of schedule and looked to address concerns over energy prices."

"He vowed to bomb “at a much, much harder level” if Iran disrupted oil supplies. He added that “We’re looking to keep the oil prices down. They went artificially up because of this excursion.” Brent oil prices slipped over 15% after his comments at the press conference but still closed higher for the day."

"G7 finance ministers said they are ready to take steps to support global energy supply. In a statement, the group said “We will continue to closely monitor the situation and developments in the energy markets and will meet as needed to exchange information and to coordinate within the G-7 and with international partners."

"There were reports that President Trump is considering several options to address the surge in oil and gasoline prices. These include releasing emergency stockpiles, a pause to federal gas tax, and the US Treasury Department’s involvement in the oil futures market."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)