Web Desk: International oil prices rose very fast but they have now fallen even faster. Prime Minister Shehbaz Sharif announced that fuel prices in Pakistan will decrease if global oil prices fall. After the recent drop the government may soon cut petrol and diesel prices.
Crude oil prices had surged to about 120 dollars per barrel on Monday. The rise happened before US President Donald Trump spoke about ending the conflict with Iran.
Trump spoke during a Republican Party event in Florida. He said the war had achieved many of its goals and he planned to end it soon. His statement quickly changed the mood of the market.
Crude oil prices started falling within minutes in the New York Stock Exchange market. Stock prices also recovered after earlier losses. Oil prices dropped sharply from 120 dollars per barrel to nearly 78 dollars per barrel within a few hours.
Trump did not give an exact date for ending the war. However he warned the Islamic Revolutionary Guard Corps about blocking oil shipments in the Strait of Hormuz. He said the United States would launch attacks twenty times stronger if Iran blocked the route.
The Iranian Revolutionary Guard answered with a strong warning. They said they would not allow even half a liter of oil to pass through the Strait of Hormuz. Despite the threat oil prices continued to fall in global markets.
Prime Minister Shehbaz Sharif addressed the nation on Monday night. He promised that Pakistan would reduce petrol and diesel prices if global oil prices declined. The recent drop in crude prices has increased expectations of relief for consumers.
Global oil prices had climbed quickly between 6 March and 9 March. At one point the price of Brent Crude reached 120 dollars per barrel.
The market changed direction on 10 March after Trump’s comments. Global crude prices fell by about 17 percent. Brent crude dropped to 83 dollars per barrel. West Texas Intermediate fell to about 78 dollars per barrel.
Energy experts say the sudden drop may not last long. The situation in the Strait of Hormuz remains tense. Saudi Arabia has already announced a major cut in daily oil production. Other Arab countries have also reduced their output. Qatar has lowered gas production as well.
Markets may remain uncertain in the coming days because tensions around the Strait of Hormuz continue.
Read more: Oil prices plunge as Trump signals Iran war could end soon
