By: Economy Middle east

Oil prices fell by over 3 percent on Thursday after U.S. President Donald Trump said the killings tied to Iran’s nationwide protest crackdown had eased, reducing fears of imminent military escalation and potential supply disruptions.

As of 5:07 GMT, Brent crude dropped $2.08, or 3.13 percent, to $64.44 a barrel, while U.S. West Texas Intermediate fell $1.98, or 3.19 percent, to $60.04 a barrel. Both benchmarks closed more than 1 percent higher on Wednesday, but surrendered most of those gains after Trump’s comments eased concerns about a possible U.S. strike on Iran.

Trump’s comments ease tension fears in Iran

Oil prices fell after Trump said on Wednesday afternoon that he had been informed the killing of anti-government protesters in Iran was easing and that he did not believe there were plans for mass executions. Sentiment was also weighed down by a larger-than-expected build in U.S. crude stockpiles.

Meanwhile, Washington was pulling some personnel from military bases in the Middle East after a senior Iranian official said Tehran had warned neighboring countries it would target U.S. bases if attacked.

“The sharp reversal occurred after U.S. President Trump stated he had been informed that the “killing in Iran is stopping” and that there are “no plans for executions.” These comments saw a significant portion of the geopolitical risk premium recently built into prices unwound as fears of disruptions to Iran’s approximately 3.3 million barrels per day (bpd) of exports eased,” said Tony Scaymore, Market Analyst, IG.

“The pullback is notable as it comes from the 200-day moving average currently at $62.37 – a level that crude oil has not traded above in over five months (since August 2025),” he added.

U.S. crude stockpiles rise more than expected

Oil prices were pressured further after the U.S. Energy Information Administration said on Wednesday that U.S. crude and gasoline stockpiles rose more than analysts had forecast last week. Crude inventories increased by 3.4 million barrels to 422.4 million barrels in the week to January 9, defying expectations for a 1.7 million-barrel decline.

Adding to the bearish sentiment, Venezuela has reportedly started rolling back oil output cuts imposed under a U.S. embargo, while crude exports are also resuming.

On the demand front, OPEC said on Wednesday that global oil demand is expected to grow in 2027 at a pace similar to this year’s, and released figures pointing to an almost balanced market in 2026, at odds with other forecasts warning of a significant oversupply.

Meanwhile, government data showed that China’s crude oil imports jumped 17 percent year-on-year in December, while total imports for 2025 rose 4.4 percent, with average daily crude import volumes reaching record highs both in December and across the full year.