— This is the script of CNBC's news report for China's CCTV on May 9, Wednesday.
British, France, German and Russia released a joint statement, restating their support to Iran Deal followed US announced that it will withdraw Iran Deal. Macron, France president expressed his regret on twitter that Trump withdraws the Deal. Meanwhile, U.N and EU also concern that Iran may revenge if Trump re-take sanctions. They also suggest the other countries includes Iran continue obeying the Iran Deal. Russia ambassador to the EU said, Moscow will ensure the continued implementation of the Deal. Let's have a look of the market impact. Oil price experienced turbulence in overnight, with WTI closed down 2.4%. But in intra-day trading, before Trump published his decision, oil price violated amid the entirely different information from different media reports made markets confused.
We can see this chart of WTI oil future trend. After 11am ET, Bloomberg cited CNN's report and said that Trump will not withdraw the Deal, causing the oil price once plummeted to 4.38%. The reason behind the decline in oil price is that the market estimated the probability of US withdraws the Iran Deal, and Iran will face sanction again, cutting crude supply, which boosted the oil price. But according to New York Times, Trump has told Macron that US will withdraw the Deal, so an increase was seen in oil price.
After that, some Medias confirmed that US will withdraw the Deal, markets continued to violate till Trump released this information in person. But the closing time of crude future was one hour late compared to the normal amid high trading volume. The sanction to Iran is positive to the long-term crude market, analysts told CNBC. At present, Iran's crude oil production has recovered to a level of almost 4 million barrels per day, close to the level before the sanctions, but the sudden re-application of sanctions will bring direct pressure on the supply side.
Additionally, some companies that are related to oil price and geopolitics closely will be affected. The wall behind me lists the companies who will be influenced. For example, the agreement of exploring energy in Iran that several major oil companies signed may come to a temporary stop. And car enterprise, like Renault and Volkswagen, prepared to enter Iran market, including establish the joint venture to dominate market. And that also involved the plane manufacturers like Boeing, Airbus.
Now these plans may dash to pieces. Because this companies were preparing to enter the market after the sanction was cancelled, but now they have to give up this ambition amid the re-introduction of sanction.
We will keep an eye on this issue.