President Donald Trump appeared to undermine years of U.S. sanctions on Iran by giving China the green light to carry on buying its oil in an announcement on Truth Social.

Washington

President Donald Trump posted on Truth Social suggesting that China is permitted to keep buying oil from Iran, a statement that caught U.S. Treasury and State Department officials off guard. The White House clarified that this does not equate to a formal waiver of sanctions, but the announcement has raised questions about potential changes in U.S. policy.

The oil market reacted with surprise, as traders and analysts tried to interpret the significance of Trump's remarks. While some view the statement as a negotiating tactic in broader talks with China and Iran, others are waiting to see if it signals a shift in sanctions enforcement. Meanwhile, attention in the oil market is returning to global supply and demand fundamentals, with concerns about a possible supply glut in the near future.

Trump says China can keep purchasing oil from Iran

Before we talk about the moves in oil prices, lots of attention about this Truth Social post that President Trump put up saying that essentially he's greenlighting China to keep buying Iranian oil. How should we read that? The White House came out yesterday to say that this doesn't mean that they're waiving sanctions, but still pretty notable. Yeah, I mean you'll be shocked to hear we don't know, for a change, and look the headline on our stories today uses the word baffled and I think that is the key word here because it certainly took Treasury and state officials by surprise, it took the oil traders by surprise, I think it took all of us by surprise, and we're just trying to pass out what it actually means. Now the interpretation from the White House initially is yes, he kept whole moves open or at least removed the threat of it being closed, that allows the oil to flow. Others are perhaps interpreting it as maybe there is going to be a significant change here, you know, it is leverage in terms of his talks with China over tariffs, it's leverage with Iran over the continued ceasefire, so maybe there is change coming anyway, but basically we're going to find out. Leverage being sanctions relief at this point. Yeah. Okay, oil prices, quite the volatility the last couple of weeks, we're back to where we were essentially, what are we looking out for in the coming weeks? So I think now attention turns back to global demand, you know, and the supply on the market, so OPEC or the OPEC plus, I should say, continues to add more and more barrels. At the same time I think there are deep concerns about what demand will look like going forward, I don't think anyone's suggesting it's falling off a cliff, but you're getting imbalance in the market and I think particularly the last couple of weeks has kind of masked that trend. Yeah. That trend is now firmly intact and we go forward from there. Yeah, and many analysts talk about the potential for a big supply glut once summer demand is out of the way, so I guess we'll just go back to focusing on the fundamentals again.

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