Oil prices dropped sharply on Tuesday, falling about 7% after reaching a more than three-year high in the previous session, as U.S. President Donald Trump suggested the conflict in the Middle East could end soon, easing fears of extended disruptions to global crude supplies.
Brent crude futures declined $6.79, or 6.9%, to $92.17 a barrel at 08:40 GMT, while U.S. West Texas Intermediate (WTI) crude fell $6.55, also 6.9%, to $88.22 a barrel. Earlier in the session both benchmarks had slid as much as 11% before recovering part of their losses.
Oil had surged above $100 per barrel on Monday, reaching its highest level since mid-2022, as production cuts by Saudi Arabia and other exporters during the escalating U.S.–Israeli conflict with Iran raised concerns about major supply disruptions.
Prices later pulled back after Russian President Vladimir Putin held a phone call with Trump and presented proposals aimed at achieving a rapid resolution to the war, according to a Kremlin aide, which helped calm supply concerns.
Trump said on Monday in a CBS News interview that he believed the campaign against Iran was “very complete” and that Washington was “very far ahead” of his original four- to five-week timeline.
“Clearly Trump’s comments about a short-lived war have calmed markets. While there was an overreaction to the upside yesterday, we think there is an overreaction to the downside today,” said Suvro Sarkar, energy sector team lead at DBS Bank, adding that the market was underestimating risks at current Brent levels.
“Murban and Dubai grades are still well above $100 per barrel, so practically nothing much has changed in terms of ground realities,” he added, referring to key Middle Eastern crude benchmarks.
In response to Trump’s remarks, Iran’s Islamic Revolutionary Guards Corps said they would “determine the end of the war,” and warned that Tehran would not allow “one litre of oil” to be exported from the region if U.S. and Israeli strikes continue, according to Iranian state media citing an IRGC spokesperson.
At the same time, Trump is weighing the possibility of easing oil sanctions on Russia and tapping emergency crude reserves as part of a set of options aimed at containing the surge in global oil prices, according to several sources.
“Discussions around easing sanctions on Russian oil, comments from Donald Trump hinting that the conflict could eventually de-escalate, and the possibility of G7 countries tapping strategic oil reserves all pointed to the same message – that oil barrels will somehow continue to reach the market,” said Phillip Nova analyst Priyanka Sachdeva in a note on Tuesday.
“Once traders sensed that supply routes could still be maintained, the initial ’panic premium’ that had pushed prices above the $100 mark yesterday started to fade, and oil prices quickly pulled back.”
Goldman Sachs said it was keeping its oil price outlook unchanged due to the still-uncertain situation, maintaining forecasts for Brent at $66 per barrel in the fourth quarter of 2026 and WTI at $62 per barrel.
The Group of Seven nations said on Monday they were ready to take “necessary measures” in response to rising global oil prices, although they stopped short of committing to the release of emergency reserves.