Trump signals possible de-escalation while a now-deleted post from Washington jolts crude markets.
Oil markets swung wildly Tuesday as investors reacted to conflicting signals from Washington and the Middle East, sending crude sharply lower after a rapid rally tied to fears of escalating conflict with Iran.
Brent crude closed at $87.80 per barrel, down $11.16, or 11%, while US West Texas Intermediate settled at $83.45, dropping $11.32, or 11.9%. Both benchmarks logged their steepest daily percentage decline since March 2022 after reaching four-year highs the day before.
The sharp pullback followed comments from President Donald Trump suggesting the conflict could wind down sooner than expected. Trump said in a CBS News interview that the war against Iran was “very complete” and that the US was “very far ahead” of the timeline he initially laid out. The Iranian leadership dismissed the comments, saying that Iran would decide when the war ends.
Trump’s remarks helped cool fears that fighting in the region would severely disrupt oil flows through the Strait of Hormuz, one of the most critical shipping routes for global energy supplies, and the selloff intensified after a social media post from energy secretary Chris Wright appeared to signal US military involvement in keeping oil shipments moving.
Reuters reported that Wright wrote: "President Trump is maintaining stability of global energy during the military operations against Iran," adding, "The US Navy successfully escorted an oil tanker through the Strait of Hormuz to ensure oil remains flowing to global markets."
The post was later deleted, but not before it rattled trading desks. The Wall Street Journal reported the message triggered another rapid shift in crude prices, highlighting how sensitive the market has become to political signals and military developments.
Monday’s surge had been driven by mounting fears that the conflict could disrupt shipments through the Strait of Hormuz, a chokepoint that handles roughly a fifth of global oil flows.
But while the market has cooled since, energy executives warn that threat has not disappeared. Saudi Aramco cautioned that continued disruption in the waterway could have “catastrophic consequences” for global energy markets if shipments cannot move freely, according to reporting by The Guardian.
Reuters reported that nearly 1.9 million barrels per day of refining capacity in the Gulf has already been shut in because of the war, underscoring how quickly supply disruptions could ripple through global markets.
The latest swings illustrate how oil prices are being driven not only by physical supply risks but also by rapidly shifting geopolitical signals. In a market already on edge, even a presidential comment — or a deleted post — can send crude prices sharply in either direction.
As at 5am ET Wednesday, major consuming nations are weighing an unprecedented coordinated release of strategic oil reserves to stabilise markets unsettled by geopolitical tensions involving Iran and shipping disruptions in the Strait of Hormuz. While the potential injection of hundreds of millions of barrels has already helped temper recent price surges, officials acknowledge the measure would mainly serve as a short-term buffer given logistical limits on rapid distribution and the risk that prolonged supply interruptions could outweigh its impact. The International Energy Agency is reportedly considering what would be the largest ever release of oil reserves in its history - 400 million barrels - more than double that released in 2022 after Russia invaded Ukraine.
