- Oil prices dropped sharply after Trump suggested Iran conflict may end soon
- Brent crude fell 6.6% to $92.45, WTI declined 6.5% to $88.65 per barrel
- Prices surged Monday amid Middle East tensions and Strait of Hormuz concerns
Oil prices dropped sharply on Tuesday after U.S. President Donald Trump indicated that the conflict involving Iran may be nearing an end, easing fears of a prolonged disruption to global energy supplies. Brent crude futures fell $6.51, or about 6.6%, to $92.45 per barrel in early trading, while U.S. West Texas Intermediate (WTI) declined $6.12, or 6.5%, to $88.65. The retreat came after a dramatic rally the previous session that briefly pushed crude prices above $100 a barrel.
Oil markets had surged on Monday amid escalating tensions in the Middle East and concerns that supply flows through the region could be severely disrupted. Brent and WTI both briefly approached $120 per barrel — their highest levels since 2022 — as fears mounted over the impact of the conflict on global oil shipments.
Much of the anxiety centered on the Strait of Hormuz, a strategic chokepoint through which roughly a fifth of the world's oil supply typically passes. Disruptions in tanker traffic and production curbs by major Gulf producers had heightened concerns about tightening supply.
However, prices retreated after Trump suggested the conflict could end sooner than expected. In a television interview, the U.S. president said the war appeared to be progressing faster than anticipated and could conclude well ahead of the initial four-to-five-week timeline.
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Policy Signals Add To Market Volatility
Trump also indicated that the U.S. administration was considering steps to stabilize energy markets, including easing certain oil-related sanctions and potentially deploying naval escorts for tankers moving through the Strait of Hormuz.
The comments came after a call between Trump and Russian President Vladimir Putin, during which proposals for a quicker resolution to the conflict were reportedly discussed. The White House has already allowed India to temporarily expand purchases of Russian crude, reversing months of pressure aimed at limiting such trade.
Despite the pullback in oil prices, geopolitical risks remain high. Iran's Revolutionary Guards warned that Tehran could block oil exports from the region if attacks by the U.S. and Israel continue.
The conflict, now in its second week, has already pushed up prices across the energy complex. U.S. retail gasoline prices have climbed to their highest level since August 2024, while crude markets have experienced extreme volatility, with WTI trading in one of its widest daily ranges since the pandemic-era turmoil.
Get the latest updates on the US, Israel-Iran war here.
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