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Global oil prices dropped over 6% on Monday following comments by former U.S. President Donald Trump, who predicted de-escalation in Middle East tensions. Brent crude fell to $76.50 per barrel, while West Texas Intermediate (WTI) dropped to $72.30. Trump’s remarks during a campaign rally in Florida suggested a potential reduction in U.S. military involvement in the region, sparking fears of decreased demand for Gulf oil amid a global shift toward renewable energy. Analysts noted that geopolitical risks have long driven oil price volatility, but Trump’s influence on energy policy could reshape market dynamics. The sharp decline highlights the sensitivity of energy markets to political rhetoric, particularly regarding U.S. foreign policy. Traders are recalibrating portfolios to account for potential shifts in supply chains and demand forecasts. For Gulf producers, the drop underscores the urgency of diversifying economies away from oil dependence. The International Energy Agency (IEA) has warned that even a 5% reduction in Middle East geopolitical risks could lead to a 10% surplus in global oil markets by 2025. Investors should monitor upcoming OPEC+ meetings and U.S. election-related statements from both Trump and Biden. The U.S. Energy Information Administration (EIA) will release its monthly forecast on August 15, which could provide further clarity. Regional markets in the Gulf Cooperation Council (GCC) may see increased volatility as energy-linked equities react to price swings.
