[Edaily Reporter SIN SOO-JUNG ] International oil prices plummeted by more than 3% during Asian trading on the 2nd. Supply concerns stemming from the Middle East eased somewhat after reports emerged that U.S. President Donald Trump had conveyed to Israeli Prime Minister Benjamin Netanyahu his intention to allow more time for diplomacy before launching additional airstrikes against Iran.

According to Bloomberg MarketLabs and others, Brent crude fell more than 3% during Asian trading that day, dropping to around $110 per barrel (approximately 146,377 won). West Texas Intermediate (WTI) crude fell to around $100.90 (approximately 134,264 won). The decline, which had been in the 1% range until the morning, widened as the day progressed.

This decline marks the first significant pullback following a 15% surge in oil prices throughout the month of October. The market continues to experience sharp volatility driven by political and military factors.

Axios reported that President Trump conveyed to Prime Minister Netanyahu his intention to give more time for diplomacy with Iran. Accordingly, the decision on whether to resume airstrikes against Iran is expected to be made after the U.S. midterm elections on the 3rd.

President Trump also stated his intention to end the war with Iran soon. He said, “Either we reach an agreement, or we end it.” This is interpreted as a stance of pressing for an agreement while refraining from immediately escalating military action.

The market reacted to these remarks. Some interpret this as meaning that concerns over disruptions to crude oil supply have eased somewhat, as time has been gained to seek a diplomatic solution. However, this is merely an interpretation of the market reaction, and oil price trends could change depending on whether progress is made in the Iran negotiations.

Market forecasts have also emerged. Swiss investment bank UBS projected that the price of Brent crude would be around $110 per barrel by the end of the year. This means the current price is already at the level of UBS’s year-end forecast.

This sharp drop in oil prices is a variable that could affect refining and airline stocks, the value of the Korean won, and inflation outlooks. Lower oil prices could reduce fuel costs for airlines and ease inflationary pressures. However, oil prices remain above $100 per barrel. There is a possibility of another sharp spike if the Iran negotiations break down or airstrikes resume; therefore, the Trump administration’s decisions following the midterm elections on the 3rd are likely to determine the direction of oil prices for the time being.