Oil reversed most of its early losses of almost 4 percent to trade near $46 a barrel on Wednesday, as the market recovered from an initial Brexit-like reaction to Donald Trump’s surprise victory in the U.S. presidential election.
Oil analysts said while Trump’s victory raised concerns about future economic growth and oil demand, there were supportive factors for prices such as a potential shift in U.S. policy towards Iran.
“There are a lot of unknowns about what will be the Trump position in the geopolitics of the Middle East,” said Olivier Jakob, analyst at consultancy Petromatrix.
“President Obama from the start of his election worked towards a detente with Iran and we can’t be sure that President Trump will continue in the same direction.”
Trump has criticized the West’s nuclear deal with Iran, an accord that has allowed Tehran to increase crude exports sharply this year. Iran on Wednesday said Trump should stay committed to the deal.