Oil Plummets Below $90 After Trump's Statement on 'Practically Over' War with Iran
World oil prices, which soared on Monday to their highest levels since 2022 amid escalating tensions in the Middle East, sharply collapsed in the second half of the day following statements by Donald Trump that the war against Iran is 'practically over.'
By Monday evening, the benchmark Brent crude fell to $89.63 per barrel, while American WTI dropped to $86.20.
From $119 to $90 in a Single Day
As noted by Financial Times, Monday's trading session was one of the most volatile in recent years. Early in the day, Brent prices surged to $119 per barrel—the highest since 2022—on fears of a major supply disruption from the Persian Gulf region. However, by evening, the prices made a dramatic reversal, plummeting nearly $30 from the day's high.
Both contracts—Brent and WTI—closed the main trading session in positive territory, but the day's gains completely evaporated after the close of the main session in New York, as markets reacted to the words of the American president.
Trump's 'Little Excursion'
The key trigger for the sell-off was two statements by Trump. In an interview with CBS, he called the war with Iran 'practically fully over,' adding that 'in a military sense, there is nothing left in the country.' Later, speaking to Republican lawmakers, Trump described the operation as a 'little excursion' that would not last long.
'We made a little excursion because we felt we had to do it to get rid of some people, and I think you’ll see that this will be a short-term operation,' Trump told congressmen.
G7 Ready to Tap Reserves
Additional pressure on oil prices came from a statement by G7 finance ministers about their readiness to deploy strategic oil reserves to stabilize the market. It was after this announcement that prices rolled back below the $100 per barrel mark.
The decline in oil prices had a positive impact on stock markets: Wall Street indices closed the day in positive territory.
Putin and Trump Discuss Situation Over Phone
Amid the unfolding crisis, Russian President Vladimir Putin held a phone conversation with Trump on Monday, during which he outlined his proposals for resolving the situation in the Middle East. According to FT, Putin's position was shaped based on his contacts with leaders of Persian Gulf countries.
As a reminder, coordinated strikes by the US and Israel on Iran began on February 28 and have continued almost daily since then. In response, Tehran has been launching missile and drone attacks on targets in the UAE, Saudi Arabia, Kuwait, Qatar, Iraq, Bahrain, and Oman. The ongoing conflict has led to the closure of airspace in the region and panic in energy markets. Trump's statements about the imminent end of the operation signaled de-escalation to the markets—however, analysts warn that the situation remains highly unstable.
