Global oil prices fell sharply on Tuesday after signs that the war in the Middle East could ease, offering relief to markets that had been rattled by fears of prolonged disruption to energy supplies.
Prices dropped after US President Donald Trump suggested that the war involving Iran might end sooner than expected. His comments calmed traders who had pushed oil to a more than three-year high just a day earlier.
By early afternoon trading, Brent crude fell $7.15, or about 7.2 per cent, to $91.81 per barrel, while West Texas Intermediate dropped $6.26, or 6.6 per cent, to $88.51. At one point during the session, both benchmarks had fallen by as much as 11 per cent.
The decline followed Monday’s surge when oil briefly climbed above $119 a barrel amid fears that the US-Israeli war against Iran could disrupt supply routes in the Middle East, particularly through the vital Strait of Hormuz.
Markets began to settle after Trump said in a television interview that the conflict appeared to be nearing completion and progressing faster than originally expected.
Oil prices also retreated after Vladimir Putin spoke with Trump by phone and discussed proposals aimed at reaching a quick political settlement to the crisis.
Despite the sharp drop, analysts cautioned that the situation remains fragile. They noted that Middle Eastern oil grades such as Murban and Dubai crude are still trading above $100 per barrel, suggesting that supply concerns have not completely disappeared.
Meanwhile, Iran warned that continued US-Israeli attacks could threaten regional oil exports, while Saudi Arabia’s Saudi Aramco cautioned that prolonged disruption to shipping in the Strait of Hormuz could have serious consequences for global energy markets.
Energy ministers from the Group of Seven and leaders from the European Union were scheduled to discuss the situation later in the day as governments weigh options to stabilise global energy prices.
