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New Delhi. In the coming days, the common man of the country can get a big relief from the skyrocketing prices of petrol and diesel. If you are also worried about seeing your budget deteriorating every month due to filling of oil in vehicles, then a very good news is coming for you from the Global Market. There has been a sudden decline of 5 percent in the prices of crude oil in the international market. The reason behind this big stir is none other than a very important statement of US President Donald Trump. Trump has clearly indicated that a big historic agreement is going to be made with Iran. As soon as this news came in the market, the price of Brent crude, considered the benchmark of crude oil, fell sharply to $ 105 per barrel. At the same time, the American benchmark West Texas Intermediate (WTI) also slipped to near $ 99 per barrel. However, after this huge fall, a slight recovery in prices has also been seen.

After all, what did Trump say that caused oil prices to crash?

The main reason for this sudden slowdown in the crude oil market is a very important update from Washington. US President Donald Trump made a big revelation while talking to journalists. He told that the ongoing secret talks between Washington and Tehran (Iran) have now reached their final stage. This one statement by Trump has raised hopes in the oil markets around the world that one of the biggest obstacles to oil supply in modern history will be eliminated very soon. In anticipation of smooth resumption of oil supply from West Asia (Middle East), the prices of Brent crude slipped rapidly downwards.

The most important route to the world’s oil market and the fear of ‘Hormuz’

To understand the mathematics behind this entire incident, it is necessary to go into a flashback. When this geopolitical tension started in late February, oil prices had remained at a high level with an increase of about 40 percent. For the last several months, oil traders around the world were afraid of only one thing that the ‘Strait of Hormuz’ might be completely closed. Let us tell you that this is the same sea route through which about one-fifth of the total crude oil of the world passes. Experts feared that if this sea route remained closed till next year, the global supply chain would completely collapse. But now, a diplomatic breakthrough between the US and Iran has raised hopes that millions of barrels of oil stuck in the Persian Gulf will soon be able to reach the international market. If this happens, the ‘geopolitical risk premium’ associated with crude oil prices will decrease rapidly, due to which oil can become much cheaper.

What is the actual ground reality of oil supply till 2027?

Even though after Trump’s statement, there has suddenly been a very positive atmosphere in the market and the prices have fallen, but the big giants of the industry are still taking steps with caution regarding the ground reality. Sultan Al Jaber, Chief Executive Officer (CEO) of Abu Dhabi National Oil Company, has clarified the position on this entire matter. Giving information, he said that even if this mutual conflict ends immediately today and right now, the flow of crude oil from the Middle East is not going to become normal overnight. It may take a long time till the year 2027 to repair this entire devastated supply network and return it to its previous state. This means that even after immediate relief, it will take time to achieve complete stability.