Oil prices fell sharply on Tuesday after U.S. President Donald Trump indicated the ongoing war triggered by joint United States-Israel strikes on Iran could end sooner than expected, easing market fears of prolonged disruption to global energy supplies.
Brent crude futures dropped more than 7% to around $91 per barrel after surging to nearly $120 a day earlier, one of the sharpest swings in energy markets since the conflict began. The decline followed remarks from Trump indicating that the campaign against Iran was progressing faster than anticipated. Speaking to reporters and in media interviews, Trump said the war was “very far ahead of schedule” and suggested it could conclude “very soon.”
These comments appeared to reassure traders worried about the possibility of a prolonged closure of the Strait of Hormuz.
Earlier in the conflict, Trump had taken a harder line, declaring: “There will be no deal with Iran except unconditional surrender.”
Energy markets have been extremely volatile since the war erupted at the end of February, when U.S. and Israeli forces launched large-scale strikes on Iranian military and nuclear facilities. Iran responded with missile attacks on Israeli cities and U.S. bases in the Gulf while threatening to halt oil exports from the region.
The Strait of Hormuz, a narrow waterway between Iran and Oman through which roughly 20% of global oil supplies normally pass, remains the central pressure point in the conflict. Shipping traffic has fallen dramatically amid security concerns, leaving dozens of tankers anchored outside the strait and disrupting global supply chains.
Despite Trump’s optimistic remarks, military operations on both sides continued over the past 24 hours. U.S. and Israeli forces reportedly carried out additional strikes on Iranian military infrastructure and air-defense systems, while Iranian-aligned militias launched attacks on American bases in Iraq and Syria.
Senior U.S. officials have indicated that the campaign may intensify before any de-escalation occurs. Defense Secretary Pete Hegseth warned in a televised interview that the current phase of operations is “only just the beginning,” suggesting Washington is prepared for a longer confrontation if Iran continues attacks on regional targets.
Iran, meanwhile, has maintained a defiant stance. Iranian officials said there is currently no possibility of negotiations with Washington while strikes continue, and commanders from the Islamic Revolutionary Guard Corps have warned that Iran could target energy infrastructure across the Gulf if the attacks do not stop.
The Gulf region remains on high alert. Several countries, including Saudi Arabia and the United Arab Emirates, have increased security around oil facilities and shipping lanes amid fears of additional drone or missile attacks on energy infrastructure. Earlier in the conflict, a drone strike targeted Saudi Arabia’s Ras Tanura refinery, briefly disrupting exports and sending global oil prices soaring.
While Trump’s latest comments have calmed markets for now, analysts warn the situation remains fragile. Even a limited escalation in the Gulf—particularly involving shipping through the Strait of Hormuz—could quickly send oil prices surging again and deepen the global economic impact of the conflict.
For now, however, traders appear to be betting that the conflict may move toward a resolution sooner than previously feared, prompting the dramatic drop in oil prices after days of record volatility.