Crude oil prices rise back to $107/bbl after Trump signals US-Iran conflict will continue in West Asia; gold down 1.4%

Crude oil prices surged back to their $107 per barrel (bbl) levels during the early market session on Friday, May 15, after US President Donald Trump signalled via a social media post on Truth Social that the US-Iran conflict will continue amid an absence of a peace deal.

Latest media reports suggest that an Indian-flagged cargo ship was attacked off the coast of Oman on Thursday, despite the existing ceasefire deal between the nations at conflict and the US blockade.

Brent crude oil prices were trading slightly lower at around $105-106 per bbl during Thursday’s commodity market session, as investors await any positive developments from Trump’s meeting with China’s Xi Jinping.

The West Texas Intermediate (WTI) crude oil prices opened around $101 per bbl on Thursday, and later surged to $102 per bbl levels on the backdrop of the rising concerns of oil supply through the Strait of Hormuz in West Asia.

In India, the domestic prices of petrol and diesel have been increased by ₹3 per litre on Friday after the government-run oil companies ended a four-year rate hike pause in the market despite rising crude oil prices.

Oil prices today

At 7:35 am (IST), Brent crude oil prices were trading 1.27% higher at $107.06 per bbl on Friday, May 15, compared to $106.66 per bbl at the previous market close, according to Investing.com data.

Brent crude oil prices have risen nearly 6% in the past one week, and more than 12% in the last one month period, as per the exchange data.

WTI crude oil prices were trading 1.23% higher at $102.39 per bbl on May 15, compared to $101.17 per bbl at the previous commodity market close.

Petrol and diesel prices in India will attract an additional ₹3 per litre charge after the price hike, increasing the cost of regular petrol to ₹97.77 per litre in Delhi, and to ₹90.67 per litre for diesel.

Oil prices were kept unchanged to protect the domestic buyers since April 2022, on the backdrop of the Russia-Ukraine war, which fuelled the global oil prices in the market.

Will US-Iran conflict continue?

On the sidelines of the Trump-Xi Jinping meeting in China, the Western national leader posted that the US-Iran conflict is set to continue, signalling that President Trump is likely considering resuming the attacks amid a fragile ceasefire agreement.

“...the military decimation of Iran (to be continued!),” said Trump in his Truth Social post.

This comes after earlier this week, Trump rejected Iran’s response to the US proposal of a potential peace deal, as the Gulf nation and America failed to come to a common ground on Iran’s nuclear capabilities.

Trump has clearly stated in multiple speeches that he will not let Iran hold nuclear weapons, and considering the signs of the current geopolitical dynamic, the investors' hope for a near-term end to the West Asia conflict is far from reality.

Before meeting Xi Jinping, Trump also said that the ceasefire deal between Iran and the United States was on a “massive life support” and both nations continue to exchange dialogue amid the “weak” deal.

According to a Reuters report, India on Thursday confirmed that an Indian-flagged ship was sunk while sailing through Omani waters after a suspected military strike from a drone or a missile.

The attack reportedly happened while the ship was sailing to the United Arab Emirates from Somalia on Wednesday, after which the strike caused a fire, which led to the boat sinking in open waters. The report mentions that all 14 crew members were rescued by the Omani coast guard and moved to the Diba port.

With the recent developments in West Asia and Trump’s comments, investors are cautious on Friday’s market as the conflict is nearing the end of the 11th week since beginning at the end of February this year.

Gold prices today

The New York Mercantile Exchange-based COMEX gold prices were trading 1.44% lower at $4,617.90 per ounce as of 10:14 pm (ET) in the United States, compared to $4,685.30 per ounce at the previous market close.

The gold prices tanked on Friday’s market on the backdrop of a high US dollar demand due to the rising uncertainty in the global economy. Traders tend to buy less of the precious metal gold at a higher dollar rate, as they will be able to purchase a smaller quantity at a higher price.

This inverse relation to the US dollar is further weighing down the demand for gold among commodity investors.

Data collected from the Bloomberg US dollar spot index(DYX) showed that the greenback was trading 0.26% higher at 99.073 as of 10:14 pm (ET), compared to the previous currency market close.