Iran is taking no action without US approval, says US President Donald Trump

Iran cannot undertake any activity related to its nuclear programme without the approval of the United States (US), US President Donald Trump said, according to a report published by the Times of Israel on Thursday.

Trump said: “They’re not doing anything without our approval… It doesn’t make a difference what they’re looking at. They’re not going to have a nuclear weapon,”

He added: “Now we will make a decision [on Iran]. Do we want to go further… and certify it… so that it will never happen again. I would rather not destroy the rest of the country if possible, but maybe I will have to. You will know soon enough,”

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Separately, following an unscheduled White House meeting with Kirill Dmitriev, Russian President Vladimir Putin's special envoy, the US President said a "very big" deal with Russia to end the Ukraine war was being worked on.

How is the market responding?

West Texas Intermediate (WTI) is trading at $90.10 at the time of writing, marking a 0.40% gain for the day.

WTI Oil: Key Questions Answered

What distinguishes WTI Oil?

Traded in international markets, WTI Oil is a variety of crude oil. WTI stands for West Texas Intermediate and is one of three major varieties, alongside Brent and Dubai Crude. Its relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. Regarded as a high-quality oil, it is easy to refine. Production is based in the United States, with distribution through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, and its price is regularly cited in the media.

What determines WTI Oil prices?

Supply and demand underpin WTI Oil prices, as they do for other assets. Stronger global growth can therefore lift demand, while weaker growth can have the reverse effect. Supply disruptions arising from political instability, wars and sanctions can also affect prices. Another major influence is the production decisions of OPEC, a grouping of leading oil-producing countries. With oil traded predominantly in US Dollars, the value of the US Dollar also affects WTI crude prices: a weaker dollar can make oil more affordable, while a stronger dollar can have the opposite effect.

Why do inventory figures affect WTI Oil prices?

WTI Oil prices respond to the weekly oil inventory reports issued by the American Petroleum Institute (API) and the Energy Information Agency (EIA). Inventory movements indicate shifts in supply and demand. A decline in stocks can signal stronger demand and push oil prices higher; a build-up can indicate greater supply and weigh on prices. The API releases its report every Tuesday, followed by the EIA the next day. The two sets of figures generally align, coming within 1% of each other 75% of the time. As the EIA is a government agency, its data is regarded as more reliable.

How do OPEC decisions affect WTI Oil prices?

At meetings held twice a year, the 12 oil-producing nations in OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for member countries. These decisions frequently influence WTI Oil prices. Cutting quotas can constrain supply and lift oil prices, whereas raising production has the reverse effect. The broader OPEC+ grouping brings in ten additional non-OPEC members, with Russia the most notable among them.