Oil prices slid sharply on Tuesday, falling about 7% after hitting a more than three-year high in the previous session, as U.S. President Donald Trump suggested the conflict in the Middle East may soon wind down, easing fears of extended disruptions to global oil supply.
Brent crude futures dropped $6.79, or 6.9%, to $92.17 per barrel at 08:40 GMT, while U.S. West Texas Intermediate (WTI) crude fell $6.55, also 6.9%, to $88.22 per barrel. Earlier in the session, both benchmarks had declined by as much as 11% before trimming some of their losses.
On Monday, oil prices had surged above $100 per barrel — their highest level since mid-2022 — as output cuts from Saudi Arabia and other producers, combined with the escalating U.S.–Israeli conflict with Iran, raised concerns about significant supply disruptions.
Prices later pulled back after Russian President Vladimir Putin held a phone conversation with Trump and presented proposals aimed at reaching a swift resolution to the conflict, according to a Kremlin aide, helping to ease worries about supply shortages.
Trump said in a CBS News interview on Monday that he believed the campaign against Iran was “very complete” and that Washington was “very far ahead” of his initial estimate of four to five weeks.
“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 markets may be underestimating the 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 benchmark Middle Eastern crude grades.
Responding 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 leave the region if U.S. and Israeli strikes continued, according to Iranian state media citing an IRGC spokesperson.
Meanwhile, according to several sources, Trump is considering easing oil sanctions on Russia and tapping emergency crude reserves as part of a range of measures aimed at containing the recent surge in global oil prices.
“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 maintaining its oil price outlook unchanged due to ongoing uncertainty, forecasting 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 prepared to take “necessary measures” in response to rising global oil prices, although they stopped short of committing to release emergency reserves.
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