Oil Plunges After Trump Signals Iran War May End Soon — But Energy Markets Remain on Edge

Global oil markets were thrown into another dramatic swing Tuesday after U.S. President Donald Trump suggested that the ongoing war involving Iran could soon come to an end, sending crude prices sharply lower after days of explosive gains.

The international benchmark Brent crude plunged as much as 11% during trading, before recovering part of the losses as investors digested the potential implications of a diplomatic shift. The selloff followed one of the most turbulent trading sessions in oil market history, when prices experienced the largest intraday swing ever recorded.

Trump’s remarks appear to have been aimed at calming increasingly nervous markets that have been rattled by the escalating conflict and fears of a global inflation shock.

Even after Tuesday’s sharp drop, oil prices remain dramatically elevated.

Brent crude was trading around $91 per barrel, but just a day earlier the same benchmark had surged to $119.50 before plunging as low as $83.66 — a stunning price range that highlights the extreme volatility gripping the market.

Energy traders say the current environment ranks among the most chaotic periods ever experienced in the oil industry.

“It’s unprecedented, even for as volatile as oil is,” said Vikas Dwivedi, an oil and gas strategist at Macquarie Group. “Monday was a crazy day.”

Adding to the tension, trading for West Texas Intermediate (WTI) crude briefly halted Tuesday morning after a circuit breaker was triggered within the first two minutes of trading, reflecting the extreme price fluctuations.

The sudden drop in oil prices came after Trump indicated that the United States could take steps to stabilize the energy market and potentially end the conflict.

Among the measures he suggested:

“We’re looking to keep the oil prices down,” Trump said, adding that the recent spike was “artificially” driven by the conflict.

However, the president also acknowledged that the war would not end immediately, noting that the situation could take time to resolve.

At the same time, Trump emphasized that the U.S. would continue pursuing its military objectives, stating that Washington would not relent “until the enemy is totally and decisively defeated.”

Despite Tuesday’s price drop, the fundamental supply situation remains tense.

The conflict has effectively shut down large portions of shipping through the Strait of Hormuz, one of the world’s most critical oil chokepoints.

Under normal conditions, the narrow waterway carries about one-fifth of global oil supplies from the Persian Gulf to international markets.

Since the war began on February 28, attacks on multiple vessels have caused most shipping companies to avoid the route entirely, leaving only a handful of tankers attempting the passage.

As a result, oil producers in the region are facing mounting logistical challenges.

Four of the Middle East’s largest oil exporters — Saudi Arabia, Iraq, the United Arab Emirates, and Kuwait — have collectively reduced production by up to 6.7 million barrels per day.

With export routes disrupted and tankers unable to load normally, storage facilities across the region are beginning to fill up.

The supply disruptions have already pushed oil prices nearly 50% higher this year, intensifying concerns about a global inflation surge.

Higher energy costs have also spilled into other sectors.

Prices for natural gas, diesel, and gasoline have climbed sharply, with U.S. retail gasoline reaching its highest level since August 2024, placing additional political pressure on the White House.

To counter the crisis, the world’s largest economies are reportedly considering the release of strategic petroleum reserves in an effort to stabilize global supply.

At the same time, Washington has quietly adjusted some energy policies to ease pressure on the market.

Last week, the U.S. government allowed India to temporarily increase purchases of Russian crude, reversing months of restrictions aimed at curbing the trade.

Trump also revealed he had discussed the oil market situation with Russian President Vladimir Putin during a phone call earlier this week.

While Trump’s comments briefly calmed markets, many traders remain cautious about assuming the crisis will end quickly.

Energy analysts say the future direction of oil prices depends almost entirely on how the conflict with Iran unfolds.

“Everything depends on how the situation evolves,” said Thu Lan Nguyen, head of commodity and foreign-exchange research at Commerzbank.

“If the war ends within the next couple of weeks, oil prices would likely fall further,” she added.

For now, the global oil market remains caught between geopolitical risk and political intervention.

Prices may have dropped sharply after Trump’s remarks, but the underlying tension — from disrupted shipping routes to reduced Middle Eastern production — continues to threaten global energy stability.

Until the conflict shows clear signs of ending, traders expect oil markets to remain volatile, unpredictable, and deeply sensitive to every political development.

And in a world where a single statement from a world leader can move billions of dollars in energy markets, the next swing could come at any moment.