Oil prices immediately fall after news of John Bolton’s firing
Oil prices plummeted Tuesday after President Donald Trump fired Iranian hawk John Bolton as national security adviser.
Bolton’s surprise departure prompted speculation that tensions between the United States and Iran could ease, or at least reduce the likelihood of military conflict..
Bolton was a strong supporter of the campaign «maximum pressure» the Trump administration against Iran. This campaign was based on tough sanctions that led to a reduction in Iranian oil exports..
US oil fell 2.2% to $ 57.30 a barrel just after Trump tweeted Bolton’s firing.
«It’s a knee-jerk reaction given that Bolton was so hostile to Iran, said Matt Smith, director of commodities strategy at ClipperData. – With his removal, one can expect that there will be no such tension in relations with Iran».
It is not a fact that Bolton’s departure was related to Iranian politics. Trump was annoyed by reports that he faced opposition from Bolton over his decision to host leaders «Taliban» at Camp David. Trump announced on Saturday that the meeting has been canceled.
Trump did not mention Iran on Twitter, announcing Bolton’s firing. «I strongly disagree with many of his proposals, like others in the administration.», – said in a tweet from the President of the United States.
Bolton was scheduled to briefly meet with Secretary of State Mike Pompeo and Treasury Secretary Stephen Mnuchin at the White House later on Tuesday..
Earlier this year, tensions between the United States and Iran rose to levels that raised fears of war. Oil prices jumped as investors feared attacks on oil tankers could disrupt supplies in the Strait of Hormuz, the most important location on the planet for the world’s oil supply.
Iranian oil exports have dropped by about 2 million barrels per day since summer 2018, according to ClipperData..
Despite the standoff with Iran, oil prices have not risen in recent months due to concerns about weak energy demand caused by the US-China trade war and a slowdown in the global economy..
On Tuesday, the US Energy Information Administration downgraded its forecasts for oil consumption due to concerns about the economy. The agency currently expects global oil demand to rise by 900,000 barrels per day this year, potentially the weakest growth since at least 2011..