Trump says oil prices will drop sharply after US defeats Iran

US President Donald Trump has linked a significant drop in oil prices to the United States' ability to defeat Iran, as American and international efforts continue to address rising energy costs and supply disruptions amid concerns over the impact of the Strait of Hormuz crisis on oil and fuel markets.

On Thursday, Trump said oil prices would fall sharply once the US succeeds in defeating Iran.

As part of his push to lower energy prices ahead of the midterm elections scheduled for November 3, Trump pressed European Union countries to release oil from their reserves, warning of a possible US ban on diesel exports if they did not comply.

These moves coincided with an International Energy Agency (IEA) agreement on Thursday to release more than 20 million barrels of diesel to markets as soon as possible, in addition to any remaining volumes from the largest-ever emergency stockpile release pledged in March to boost supplies and curb rising prices.

The IEA's board, which includes 32 member countries, met on Thursday to discuss the size and timing of the stock release. In a statement after the meeting, the agency said, "The IEA Governing Board reaffirmed its commitment to continue implementing the collective actions agreed in March in response to the Strait of Hormuz crisis."

In March, member states pledged to release more than 400 million barrels of crude oil and petroleum products amid a sharp rise in prices.

In trading, oil prices fell by more than a dollar in early Thursday dealings, as investors assessed supply risks from attacks on ships passing through the Strait of Hormuz, alongside US efforts to lower shipping costs by easing sanctions on vessels.

By 04:52 GMT, Brent crude futures had dropped $1.86, or 1.75%, to $104.20 a barrel, while US West Texas Intermediate crude futures fell $1.42, or 1.30%, to $93.85 a barrel, erasing gains from the previous session, according to Reuters.

These developments come as diesel prices hit record highs in many markets, driven by supply disruptions from the Middle East war and the Russia-Ukraine conflict, raising concerns about inflation and living costs and posing challenges for governments and consumers.