Oil prices experienced a sharp decline on Tuesday, falling over 6% after reaching their highest levels in more than three years. U.S. President Donald Trump's prediction of an imminent end to the Middle East conflict eased concerns about prolonged disruptions to global oil supplies. Brent futures fell 6.6% to $92.45 a barrel, while U.S. West Texas Intermediate (WTI) crude was down 6.5% to $88.65.
Earlier, prices had surged past $100 a barrel on Monday, hitting session highs due to fears of major supply disruptions stemming from the expanding U.S.-Israeli war with Iran and production cuts by Saudi Arabia and other producers. Prices retreated after Russian President Vladimir Putin shared proposals with President Trump aimed at a quick settlement to the Iran war.
President Trump stated in an interview that the war against Iran was "very complete." However, Iran's Revolutionary Guards (IRGC) issued a statement indicating they would "determine the end of the war" and would not permit oil exports from the region if attacks continued. These comments did not significantly impact prices, which were also influenced by President Trump considering easing oil sanctions on Russia and releasing emergency crude stockpiles to curb spiking global oil prices.
Market analysts expect crude oil to remain highly volatile. Gulf oil producers, including Iraq and Kuwait, have already begun cutting output due to shipping disruptions. Saudi Arabia has also reportedly started trimming production. The G7 nations indicated readiness to implement "necessary measures" in response to surging oil prices, without committing to releasing emergency reserves.