Oil Slips After Trump Hints Iran War Will End
Oil prices fell sharply after US President Donald Trump said the Iran war would soon end, triggering new volatility in the already volatile energy market. Brent and WTI both briefly surged more than 10% before paring losses, as market participants reassessed the geopolitical risk premium that had boosted prices in recent sessions.
Trump said his administration planned to lift oil-related sanctions and requested US Navy ships escort tankers through the Strait of Hormuz. Brent fluctuated around US$94 per barrel on Tuesday after breaking through and holding above US$100 for most of the session the previous day. Trading ranges on Monday were wide, with Brent moving around US$36—reflecting a headline-driven market and rapid position adjustments.
However, market participants believe that political conditions do not automatically restore tanker flows. Vanda Insights analysts noted that claims of an imminent end to the war do not guarantee a return to normal traffic in Hormuz, and the price decline could reflect a “panic selling” response to the latest news. The market remains focused on whether shipping security has truly improved and whether risk premiums will continue to shrink.
Oil had previously approached US$120 per barrel on Monday after major Persian Gulf producers reduced production due to the effective closure of the Strait of Hormuz, a narrow waterway that typically handles about a fifth of global oil flows. Rising energy prices have fueled inflation and reduced expectations for central bank interest rates, while the introduction of US retail gasoline restrictions has added domestic pressure on Trump.
Trump did not establish a tanker escort mechanism or impose sanctions, but acknowledged discussing the topic with Russian President Vladimir Putin. On the ground, tanker flows remain frequent: some vessels are avoiding Hormuz after attacks on ships since the war began, although tankers carrying Saudi oil are reportedly still passing through, and Iran is still shipping large volumes. Several producers, including Saudi Arabia, Iraq, Kuwait, and the UAE, are said to be reducing production as storage capacity is rapidly filling, while Asian buyers are competing to raise bids to attract diverted supply.
In midday trading Tuesday in Singapore, Brent May delivery fell 5.3% to US$93.69 after closing 6.8% higher on Monday. April WTI deliveries fell 5.3% to US$89.70 per barrel. (alg)
Source: Newsmaker.id
