Oil prices plunged Tuesday after President Donald Trump declared the Iran war would be over “very soon,” triggering a dramatic market reversal that sent stocks surging and crude tumbling from its highest levels since Russia’s 2022 invasion of Ukraine.
Brent crude, the global benchmark, slid 7% to trade at $91.8 a barrel. WTI, the U.S. benchmark, fell more than 6% to around $88.6 a barrel. Just Monday, both benchmarks had surged above $100 a barrel for the first time since 2022, with Brent briefly touching $120.
The sharp reversal came after Trump told CBS in a phone interview: “I think the war is very complete, pretty much.”
Although he later appeared to contradict those remarks — vowing on Truth Social to hit Iran “TWENTY TIMES HARDER” if it “does anything” to stop oil flows through the Strait of Hormuz — investors seized on the prospect of de-escalation.
The Pre-War Price
Before the United States and Israel launched strikes on Iran on February 28, Brent crude traded at around $73 a barrel and WTI at roughly $67. Tuesday’s prices, while sharply down from Monday’s peaks, remain significantly elevated — a reminder that the conflict is far from resolved.
The White House has floated plans to provide insurance and naval escorts for ships transiting the Strait of Hormuz, though a clear strategy has yet to emerge. The G7 said Monday it stood ready to support global energy markets through the release of oil reserves if necessary.
These strategic reserves — estimated at around 1 billion barrels, excluding China and Canada — could help cap prices if the war is short-lived.
“Strategic reserves would help if the war is to be measured in weeks, which remains our base case,” said Mohit Kumar, an analyst at U.S. investment bank Jefferies. “But if it’s an extended war lasting months, strategic reserves alone would not be sufficient.”
Aramco’s Dire Warning
Even as prices tumbled, the world’s largest oil exporter issued a stark warning about what happens if the Strait of Hormuz remains closed.
“There would be catastrophic consequences for the world’s oil markets, and the longer the disruption goes on… the more drastic the consequences for the global economy,” Saudi Aramco CEO Amin Nasser told reporters on an earnings call, according to Reuters.
Nasser called the current crisis the biggest the region’s oil and gas industry has faced, noting that global oil inventories are at five-year lows . Middle East producers, including Saudi Arabia and Kuwait, have been cutting output as storage tanks fill up with oil that cannot be exported.
But Nasser offered a sliver of optimism: Aramco could ramp production back up “in days and not weeks” once transits resume.
What Comes Next
Trump’s declaration that the war will end “very soon” has calmed markets — for now. But the Strait of Hormuz remains closed. Iranian missiles and drones continue to threaten shipping. And the underlying conflict shows no sign of resolution.
Investors are betting on a quick end. Whether they’re right depends on what happens next in a war that has already defied expectations.
