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Oil prices fell sharply on Tuesday after reaching their highest level in more than three years during the previous session, as comments from U.S. President Donald Trump suggesting the Middle East conflict could end soon helped ease concerns about prolonged disruptions to global oil supplies.
Brent crude futures dropped $6.28, or 6.3%, to $92.68 per barrel at 07:15 GMT, while U.S. West Texas Intermediate (WTI) crude fell $6.19, or 6.5%, to $88.58 per barrel. Both benchmarks had earlier plunged by as much as 11% before recovering part of their losses.
Oil prices had surged above $100 per barrel on Monday, reaching their highest level since mid-2022, as supply cuts by Saudi Arabia and other producers during the expanding U.S.-Israeli conflict with Iran fueled fears of severe disruptions to global energy supplies.
Hopes for diplomatic progress weigh on prices
Prices began retreating after reports that Russian President Vladimir Putin spoke with Trump and shared proposals aimed at reaching a quick settlement to the conflict, according to a Kremlin aide. The news helped calm markets concerned about extended disruptions to oil flows.
Trump also said in a CBS News interview on Monday that the war against Iran was nearing completion, stating that Washington was “very far ahead” of the four- to five-week timeline he had initially projected.
Iran warns of regional oil export halt
Despite the easing in prices, tensions remain high. Iran’s Islamic Revolutionary Guards Corps (IRGC) responded to Trump’s comments by saying Tehran would determine when the war ends.
According to Iranian state media, the IRGC warned that Iran would not allow “one litre of oil” to be exported from the region if U.S. and Israeli attacks continue.
Such threats have kept markets on edge given the Middle East’s critical role in global oil supply.
Potential policy moves to ease prices
Oil markets were also pressured by reports that the U.S. administration is considering several measures to curb rising energy prices.
These options reportedly include easing oil sanctions on Russia and potentially releasing crude from emergency stockpiles, steps that could increase global supply and stabilize prices.
Meanwhile, G7 nations said on Monday they were prepared to take “necessary measures” in response to surging oil prices, although they stopped short of committing to a coordinated release of strategic reserves.
While prices have pulled back from recent highs, analysts say oil markets remain highly sensitive to developments in the Middle East conflict and any policy actions aimed at stabilizing global energy supplies.
