Global oil prices dropped sharply on Tuesday after reaching their highest levels in more than three years during the previous trading session. The pullback came after Donald Trump said the conflict in the Middle East could end sooner than expected, easing fears of a long disruption to global energy supplies.
By 07:15 GMT, Brent crude futures had fallen $6.28, or 6.3%, to $92.68 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude declined $6.19, or 6.5%, to $88.58 per barrel. Earlier in the session, both benchmarks dropped as much as 11% before recovering part of their losses.
Just a day earlier, oil prices had surged above $100 per barrel, reaching their highest level since mid-2022. The rally was fueled by fears that the expanding war involving the United States, Israel, and Iran could disrupt critical oil supplies from the Middle East.
Energy markets are highly sensitive to geopolitical risks, especially when tensions involve key oil-producing regions. Even small threats to supply routes can quickly push prices higher as traders anticipate shortages.
Middle East War Drives Market Swings
Oil markets have been extremely volatile as traders try to understand how the conflict might affect global supply. Earlier gains were driven by production cuts from Saudi Arabia and other oil-producing nations, combined with fears that the war could block important shipping routes.
However, prices began falling after Vladimir Putin reportedly spoke with Trump and shared ideas aimed at ending the conflict quickly. According to a Kremlin aide, the conversation included proposals designed to help reach a settlement and calm global markets.
Trump later told CBS News that the war with Iran was already “very complete” and progressing faster than he initially expected. Earlier estimates suggested the conflict could last four to five weeks, but the U.S. administration now believes it may end sooner.
Analysts say these statements helped cool the market after Monday’s sharp rally.
Suvro Sarkar, energy sector lead at DBS Bank, noted that oil prices may have overreacted in both directions.
Key price movements during the latest trading sessions include:
- Brent crude fell 6.3% to $92.68 per barrel
- WTI crude dropped 6.5% to $88.58 per barrel
- Prices had surged above $100 the previous day
- Earlier Tuesday losses briefly reached 11%
Supply Risks Still Hang Over Market
Despite Tuesday’s decline, many analysts warn that risks to global oil supply have not disappeared. Middle Eastern oil benchmarks such as Murban and Dubai crude are still trading above $100 per barrel, suggesting that underlying supply concerns remain strong.
Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC) responded to Trump’s remarks by warning that Tehran would decide when the war ends. Iranian officials also stated that the country would not allow “one litre of oil” to leave the region if attacks from the United States and Israel continue.
At the same time, policymakers are exploring several options to stabilize prices. Trump is reportedly considering easing sanctions on Russia and releasing emergency oil stockpiles to prevent a major supply shock.
Additional measures under discussion include:
- Possible sanctions relief on Russian oil exports
- Potential release of strategic oil reserves
- Emergency coordination among G7 nations
The G7 said it is prepared to take “necessary measures” if oil prices continue to surge, although no formal decision has yet been announced.
For now, traders remain focused on one key question: whether the Middle East conflict will escalate further or move toward a faster-than-expected resolution. Until that becomes clear, oil prices are likely to remain volatile.