OIL prices dropped significantly during early Asian trading on Tuesday after climbing to their highest levels since 2022 the previous day. The decline followed remarks from former U.S. President Donald Trump indicating that the conflict with Iran could conclude sooner than expected, easing market fears of prolonged disruptions to global crude supply.
At the time of reporting, Brent crude was priced at $93.16 per barrel, marking a 5.86 percent decline, while West Texas Intermediate (WTI) slipped to $89.06 per barrel, down 6.03 percent during the trading session.
In an interview with CBS News, Trump said the military operation was already “very complete, pretty much,” adding that progress had moved much faster than his earlier projection that the conflict could last between four and five weeks, Oilprice.com noted.
He later reiterated to reporters that the war could end ‘very soon,’ though he noted that it was unlikely to be resolved within the coming week.
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The comments quickly influenced energy markets, prompting traders to scale back expectations of extended supply disruptions from the Middle East.
Just a day earlier, oil prices had spiked above $100 per barrel, briefly nearing $120, as tensions escalated in the region and Tehran announced Ayatollah Mojtaba Khamenei as its new supreme leader.
Additional downward pressure on prices emerged after Russian President Vladimir Putin reportedly spoke with Trump and proposed ideas aimed at ending the conflict quickly, according to a Kremlin aide.
Meanwhile, finance ministers from the G7 stated that the group remains ready to intervene to stabilise oil markets if necessary, although they stopped short of announcing any coordinated release of strategic petroleum reserves.
Despite the steep decline, analysts caution that the oil market could continue to swing sharply due to lingering geopolitical risks, particularly uncertainty over how Iran might react if hostilities with the United States were halted.
“Considering the developments over the past 24 hours, crude oil is likely to remain extremely volatile, potentially trading within a broad range between about $75 and $105 in the near term,” IG market analyst Tony Sycamore said in a note cited by Reuters.
Production disruptions across parts of the Gulf are also shaping the outlook. Iraq has reduced output from its main southern oilfields by roughly 70 percent to about 1.3 million barrels per day, while Kuwait Petroleum Corporation has begun cutting production and declared force majeure. Saudi Arabia has also moved to scale back output.
Iran has warned it could intensify its response if attacks continue. The Islamic Revolutionary Guard Corps (IRGC) said Tehran would ultimately determine how the conflict ends and cautioned that it could prevent oil exports from the region if U.S. and Israeli strikes persist.
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The drop in crude prices helped lift broader financial markets, particularly in China. Chinese assets advanced in early Tuesday trading as lower energy costs improved sentiment. Prior to the conflict, China sourced roughly 13 percent of its oil imports from Iran, making price fluctuations especially important for its economy.
For now, investors remain watchful as they assess whether tensions will escalate further or if diplomatic efforts will gain momentum in ending the conflict.
