Oil prices have plunged substantially while stock markets worldwide soared after US President Donald Trump’s recent statements on the Iran dispute. Brent crude sank over 6% to roughly $92 per barrel, and WTI dipped to $88.65, reversing Monday’s jump to nearly $120 amid de-escalation hopes.
Trump’s Statement Sparks Reversal
Displaying the confidence of the man who has repeatedly cast himself — even if not everyone agrees with him — as victorious in his decades-long war against Iran, President Trump declared in an interview broadcast by CBS News that “it’s a very complete campaign” and “we’re ahead of schedule,” suggesting it could be over quickly after a series of strikes initially planned for four to five weeks. He described winning as rendering Tehran unable to threaten the United States or Israel or allies, and warned that Tehran could not disturb oil flows through the Strait of Hormuz after it “threatened” with strikes, “twenty times harder.”
This came after US-Israeli strikes earlier in the month on Iranian military and nuclear sites that had raised supply fears and sent prices surging. Tensions were further eased by Russian President Vladimir Putin’s proposals for a speedy settlement, communicated to Trump by telephone.
Oil Market Volatility
Prices swung wildly, dropping more than $20 from intraday highs of $119.50 for Brent and 119.48 for WTI — their highest since 2022 — before settling lower. Gulf producers such as Iraq and Kuwait reduced output due to disrupted shipping, with Iraq reducing southern fields by 70 percent to 1.3 million barrels per day.
Trump has been floating easing oil sanctions on Russia and draining US emergency stores to limit spikes, with the Strategic Petroleum Reserve 58% full. Expect volatility, analysts say, with crude bouncing between $75 and $105 in the short term.
Global Stocks Rally
Equity markets welcomed the news, with the S&P 500 up 0.83% on de-escalation signs although down 0.73% year-to-date; futures were up 0.19%. Asia was in the lead, with South Korea’s KOSPI jumping 5.35%, and European and UK markets also opened higher.
In Indian markets, aviation shares including IndiGo and SpiceJet gained as much as 8% on cheaper fuel costs, with oil prices dropping below $90. The Saudi oil giant’s chief executive said “catastrophic” risks loomed if the fighting continued, including chain reactions in aviation and agriculture.
Lingering Risks and Outlook
Iran’s Revolutionary Guards pledged to determine the end of the war and stop oil exports from countries in the region if attacks continue, but markets yawned. Israel’s Netanyahu suggests more action required, and without opening of Strait ‘ripple effects,’ experts say Saudi cuts in 20 days, may result in $150 oil
Trump called on oil tankers to boldly pass through the Strait, citing the neutralization of the Iranian navy. That leaves markets on edge, despite the relief rally.