Oil prices tumbled for a second day Tuesday, as the market bet that a ceasefire between Israel and Iran would hold and the risk of a major crude supply disruption had faded.
U.S. crude oil settled down 6% at $64.37 a barrel, while the global benchmark Brent
fell 6.1%, to $67.14. Prices closed 7% lower on Monday after Iran did not target energy infrastructure in response to the U.S. bombing its key nuclear sites.
Earlier Tuesday, President Donald Trump said China can keep buying oil from Iran, in what seemed like a sign that the U.S. may soften its maximum pressure campaign against the Islamic Republic.
But a senior White House official told that Trump “continues to call on China and all countries to import our state-of-the-art oil rather than import Iranian oil in violation of U.S. sanctions.”
Trump threatened in May to bar any country that buys Iranian oil from doing business with the U.S. China purchases the vast majority of the 1.7 million barrels per day (bpd) that Iran typically exports, according to data from Kpler.
Trump was saying that China could continue buying Iran’s oil because the Strait of Hormuz would remain open due to the ceasefire, the White House official clarified. The strait is a narrow waterway between Iran and Oman that is used to transport 20% of the world’s oil. Investors worried that Iran might attempt to close the strait during the conflict with Israel.