Oil prices tumble after Trump eases concerns over Iran

AFP | London

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Oil prices slumped yesterday after US President Donald Trump appeared to dial down threats of imminent military action on crude producer Iran.

International oil benchmarks Brent North Sea crude and West Texas Intermediate slumped around five percent after Trump on Wednesday said he would “watch it and see” on possible intervention in the Islamic republic.

Trump added that he was told that the killings of protesters there had stopped.

Crude prices had surged over recent days as Trump talked about coming to the aid of the Iranian people over the crackdown on demonstrations, sparking concerns over possible disruption to global supplies.

“Oil prices are trading sharply lower after Trump signalled he is not taking military action against Iran,” noted Victoria Scholar, head of investment at Interactive Investor.

Volatility extended across commodity markets, with silver plunging more than seven percent in Asian deals after hitting a record high above $93.75 an ounce.

This was after Trump also held off slapping tariffs on critical minerals.

The price of gold, which has hit multiple record highs in recent months thanks to its status as a safe haven investment, dipped yesterday.

In stock market trading,  a forecast-busting fourth quarter net profit by Taiwanese chipmaking titan TSMC helped turn around investor sentiment.

The tech-heavy Nasdaq Composite jumped nearly one percent as trading got underway in New York.

“A strong set of results from Taiwan Semiconductor Manufacturing Company quickly shifted the mood, reminding markets that enthusiasm around artificial intelligence and longterm growth themes remains very much alive,” said Forex.com analyst Fawad Razaqzada.

He noted that technology stocks had looked vulnerable in recent weeks as investors shifted funds into other sectors.

Meanwhile Labor Department data showed that first-time unemployment claims dipped back under 200,000 last week in the United States.

“The key takeaway from the report is that it corroborates a low firing-low hiring environment that will keep the Fed on watch but also on hold in terms of a rate cut this month and possibly until June,” said Briefing. com analyst Patrick O’Hare.

With US inflation continuing to run higher than its target rate of two percent and both the labour market and overall economy holding up, Federal Reserve policymakers have indicated they will likely hold off cutting rates at this month’s meeting.

In European trading, London’s top-tier FTSE 100 index hit a fresh record high after official data showed Britain’s economy rebounded in November.

Frankfurt edged higher in afternoon deals as traders reacted to news that Germany’s economy eked out meagre growth in 2025, dodging a third straight year of recession.

The Paris stock market fell slightly, dragged down in part by a drop in the share price of TotalEnergies in the wake of oil’s retreat.

In Asia, Tokyo closed down 0.4 percent, cooling off after gains fuelled by speculation that Prime Minister Sanae Takaichi would call an election to capitalise on strong public approval ratings.

Takaichi’s ruling party and a coalition partner said Wednesday she intends to dissolve parliament next week for a snap election, seen as a chance to push through her ambitious policy agenda.