WTI crude was sliding after mixed inventory data, but accelerated the losses, breaking below yesterday's lows, after headlines suggesting Bolton was fired after disagreeing with Trump's desire to ease Iran sanctions to get a meeting with Rouhani.
The reaction in crude (more supply) was instant...
As Bloomberg reports, President Trump discussed easing sanctions on Iran to help secure a meeting with Iranian President Hassan Rouhani later this month, prompting then-National Security Advisor John Bolton to argue forcefully against such a step, according to three people familiar with the matter.
After an Oval Office meeting on Monday when the idea came up, Treasury Secretary Steven Mnuchin voiced his support for the move as a way to restart negotiations with Iran, some of the people said.
“Bolton made sure to block any and all avenues for diplomacy w/ Iran, including a plan being brokered by Macron,” Suzanne DiMaggio, a senior fellow at the Carnegie Endowment for International Peace, said on Twitter.
“The French are offering Trump a facing-saving way out of a mess of his creation. He should grab it.”
And we know how it ended, later that day, Trump decided to oust Bolton, whose departure was announced Tuesday.
Charles Kupchan, a senior fellow at the Council on Foreign Relations, said that at the very least, Bolton’s exit reduces the chances of a military escalation.
“It’s too hard to say if a meeting will happen given the question of whether it’s politically palatable for both leaders,” said Kupchan.
“But the likelihood of a meeting has gone up because one of its main detractors is now out of a job.”
Of course, easing any sanctions without major concessions from Iran would undercut the pressure campaign that not only Bolton, but also Secretary of State Michael Pompeo and Trump have said is the only effective way to make Iran change its behavior.
Asked on Tuesday if he could foresee a meeting between Trump and Rouhani during the UN meeting, Pompeo responded: “Sure,” adding, “The president’s made very clear, he is prepared to meet with no preconditions.”