Oil Slips as Report Says Trump Willing to End Iran WarBut Threats to Destroy Kharg Island Remain

Oil prices sank and most stocks rose on Tuesday, following a report that indicated Donald Trump was willing to end the Iran war even if the key Strait of Hormuz remained closed.

But investors remain wary as the Wall Street Journal story came on the same day the US president threatened to destroy Iran’s key oil export hub and desalination plants.

The Contradiction

The Journal, citing administration officials, said Trump and his aides had concluded that a mission to reopen the waterway would extend past his four- to six-week timeline. He has decided to focus on battering Iran’s missiles and navy before pursuing diplomacy.

However, Trump also threatened Monday to destroy Kharg Island through which most of Iran’s crude passesif a peace deal is not reached.

He warned US forces would destroy “all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalination plants!).”

Destroying civilian infrastructure could constitute a war crime, experts say.

Oil Prices

Both main oil contracts fell on Tuesday, though West Texas Intermediate and Brent were still sitting well above $100 a barrel.

Market experts warned that any US ground operation or wider Iranian retaliation could send oil prices to levels not seen since July 2008, when Brent hit almost $150 a barrel.

Iran’s Response

In a sign Iran was determined to keep control of Hormuz, state media reported that a parliamentary commission had approved plans to impose tolls on vessels transiting it.

Israel-Hezbollah Fighting

The Israeli military said four soldiers had been killed in combat in southern Lebanon, where its forces are clashing with Iran-backed Hezbollah.

Another soldier was severely wounded.

Tehran Hit

Explosions were heard in Tehran, and power cuts hit some parts of the capital, Iranian media reported.

“Power outages in parts of Tehran after multiple explosions heard,” Fars news agency reported.

Iraq Strikes

Iraq’s Popular Mobilisation Forces (PMF) said US-Israeli forces carried out air strikes on two of their bases in the Babil and Anbar provinces.

No casualties were reported.

Dubai Attacks

An Iranian attack sparked a fire on a Kuwaiti oil tanker at Dubai Port. There were no injuries.

Also in Dubai, falling debris from an air defence interception sparked a fire and wounded four people.

The Bottom Line

Oil is down on peace hopes. But Kharg Island is in Trump’s crosshairs. Four Israeli soldiers are dead. Tehran is under fire. Hormuz tolls are coming.

The war is not overand the next headline could send oil soaring again.

{Source: IOL}

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