Oil Slides After Trump Signals War May End Soon, but Supply Risks Persist
Oil prices tumbled after U.S. President Donald Trump said the war with Iran will end soon, as he faces growing pressure over a conflict that has disrupted global energy markets and revived fears of an inflation shock. Brent fell as much as 11% before paring some losses, following a dramatic Monday session that recorded the largest intraday price swing on record. Futures extended declines on Tuesday after Trump sought to reassure markets, saying that beyond ending the war he would consider waiving oil-related sanctions and would have the U.S. Navy escort tankers through the strategically vital Strait of Hormuz.
Even with the sharp pullback, prices remain up nearly 50% this year as the risk of Middle East supply disruptions has increasingly materialized. Four of the region’s major producers—Saudi Arabia, Iraq, the United Arab Emirates and Kuwait—have cut combined output by as much as 6.7 million barrels a day, as the war has effectively shut the area’s main export route and caused storage tanks to fill. Brent was trading around $91 a barrel on Tuesday, a day after swinging between a high of $119.50 and a low of $83.66, underscoring one of the most volatile stretches for oil in recent memory as the conflict enters its second week.
The war has drawn more than a dozen countries into the turmoil and has pushed up prices for natural gas and refined products such as diesel. In the U.S., retail gasoline has climbed to its highest level since August 2024, adding to political pressure on the White House. Crude remains far above pre-war levels due to the effective closure of the Strait of Hormuz—a narrow waterway that typically carries about a fifth of global oil flows—while the world’s largest economies have also weighed a coordinated release of emergency reserves as one option to dampen the surge.
Shipping through Hormuz has slowed to a trickle after multiple vessel attacks since the war began on Feb. 28 prompted most operators to avoid the route. In recent days, a tanker carrying Saudi crude managed to transit, and Iran has continued to ship large volumes, but flows are still well short of normal. “Everything depends on how the situation in Iran evolves,” said Commerzbank’s Thu Lan Nguyen, adding that if the war ends within the next two weeks, oil prices could fall further.
Investors have remained skeptical about the Trump administration’s efforts to calm energy markets, but Trump’s latest remarks signaled a greater willingness by the White House to publicly suggest it may be moving toward ending the war. Trump offered few details on escort plans or sanctions waivers, beyond saying he discussed the topic with Russian President Vladimir Putin in a phone call on Monday. He reiterated that the administration wants to keep oil prices down, argued prices rose “artificially” because of the conflict, and said he did not expect the war to end this week. At the same time, he acknowledged unresolved questions around leadership in Tehran and vowed he would “not relent” until the enemy was “totally and decisively defeated.”
Market stress was evident early Tuesday as the start of trading in West Texas Intermediate futures was briefly halted by a circuit breaker within the first two minutes—similar to a pause seen on March 2 after the war began. Brent for May settlement was down about 9% at $90.25 a barrel in London morning trade, while WTI for April delivery fell 8.2% to $87.00 a barrel.
Source : Newsmaker.id
