Oil Prices Drop After Surge as Trump Signals Possible End to Middle East Conflict

Oil prices fell sharply on Tuesday after surging to their highest level in more than three years during the previous trading session, as comments by US President Donald Trump suggesting the Middle East conflict could end soon helped calm global markets.

Brent crude futures dropped $6.79, or about 6.9%, to $92.17 per barrel in morning trading. US West Texas Intermediate (WTI) crude declined by $6.55, also around 6.9%, to $88.22 a barrel. Earlier in the session, both benchmarks had fallen by as much as 11% before recovering some of the losses.

The decline came after oil prices briefly climbed above $100 per barrel on Monday, reaching their highest level since mid-2022. The surge was driven by concerns that the expanding conflict involving the United States, Israel and Iran could disrupt global energy supplies. Production cuts by Saudi Arabia and other oil producers had already tightened supply, adding to market anxiety.

Prices began to ease after reports that Russian President Vladimir Putin spoke with Trump by phone and discussed proposals aimed at quickly ending the conflict. According to a Kremlin aide, the conversation included ideas intended to reach a settlement and reduce tensions, which helped reassure traders worried about supply disruptions.

Trump also told CBS News that he believed the war against Iran was nearing completion and that developments had moved faster than initially expected. He said the United States was “very far ahead” of the earlier estimate that the conflict could last four to five weeks.

Market analysts said the president’s remarks helped ease fears in the oil market, though uncertainty remains. Suvro Sarkar, energy sector team lead at DBS Bank, said the shift in sentiment may have caused traders to react strongly in both directions.

“Clearly Trump’s comments about a short-lived war have calmed markets,” Sarkar said. “While there was an overreaction to the upside yesterday, we think there is an overreaction to the downside today.”

He added that key Middle Eastern crude benchmarks such as Murban and Dubai oil grades are still trading above $100 per barrel, suggesting that supply risks in the region remain significant.

Iran’s Islamic Revolutionary Guards Corps responded to Trump’s remarks by warning that Tehran would determine how the conflict ends. According to Iranian state media, the group’s spokesperson said Iran would not allow “one litre of oil” to be exported from the region if attacks by the United States and Israel continued.

Oil prices also faced pressure from reports that the Trump administration is considering measures to stabilise energy markets. These options reportedly include easing sanctions on Russian oil and releasing crude from emergency stockpiles.

Priyanka Sachdeva, an analyst at Phillip Nova, said discussions about sanctions, possible strategic reserve releases and signs of easing tensions all suggested that global oil supplies could continue reaching markets.

Goldman Sachs said the situation remains uncertain and it is maintaining its oil price forecast, projecting Brent crude at $66 per barrel and WTI at $62 per barrel in the fourth quarter of 2026.

Leaders of the Group of Seven nations also said they were prepared to take necessary steps if oil prices continue to rise, though they stopped short of confirming a coordinated release of emergency reserves.