Oil Prices Retreat After Trump's Comments on Iran Conflict

Oil Prices Fall After Trump's Comments on Iran Conflict

Oil prices fell sharply on Tuesday after hitting a three-year high the previous day, as fears of a prolonged global supply disruption eased following U.S. President Donald Trump's prediction of an imminent end to the war with Iran.

Brent crude dropped 7.03% to $92.00 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 7.14% to $88.00 by 09:07 GMT. Prices had surged above the symbolic $100 mark on Monday, reaching their highest level since mid-2022.

The market had been rattled by Saudi production cuts, actions by other Gulf producers, and the closure of the Strait of Hormuz due to escalating Middle East tensions, raising concerns over a major global supply disruption and rising inflation, with repercussions for monetary policy and economic activity.

However, the price surge halted Monday evening after Trump declared the war against Iran was "practically over" and "way ahead of schedule," initially estimated at four to five weeks, even though the conditions for ending the conflict, now in its eleventh day, remain uncertain.

A Revolutionary Guards spokesman said Tehran would not allow "a single liter of oil" to be exported from the region if the U.S. and Israel continued their attacks, while Trump warned of even harsher strikes if Iran maintained its blockade.

Trump also said he had a "very good" phone call with Russian President Vladimir Putin, who, according to a Kremlin adviser, shared proposals aimed at quickly ending the war.

According to several sources, Trump is considering a package of measures to curb the global oil price surge, including easing oil sanctions on Russia and tapping into strategic petroleum reserves.

A G7 finance ministers' meeting, chaired by France, was held Monday, during which coordinated use of strategic reserves was discussed, while energy ministers are set to meet Tuesday on the sidelines of the International Nuclear Energy Summit in Paris.