Oil Slumps 6% As Trump Claims Iran War Will Be Over 'Ahead of Schedule'

Global oil prices took a significant breather on Tuesday, retracing from a dramatic surge above the $100-per-barrel threshold. The market's sudden cooling follows a period of intense volatility sparked by the widening conflict involving the U.S., Israel, and Iran.

Price Action: A Sharp Correction
After a frantic Monday that saw prices skyrocket nearly 30%, benchmarks settled lower during early Tuesday trading:

Brent Crude: Dropped $6.51 (6.6%) to $92.45 a barrel.

WTI Crude: Fell $6.12 (6.5%) to $88.65 a barrel.

This correction follows a session where both benchmarks flirted with $120, levels not seen since the summer of 2022. The initial rally was fueled by fears that Gulf producers-including Saudi Arabia-would weaponize supply or face physical disruptions as regional hostilities escalated.

The primary catalyst for the price drop was a flicker of diplomatic hope. A high-stakes call between Russian President Vladimir Putin and U.S. President Donald Trump reportedly focused on a "swift settlement" regarding the Iranian front.

President Trump expressed public optimism, suggesting the military campaign was "very complete" and ahead of schedule. However, the situation remains a geopolitical powderkeg. Iran's Revolutionary Guards (IRGC) countered this narrative, threatening to block all regional oil exports-warning that "not one litre" would leave the Persian Gulf if strikes continued.

While diplomacy pressured prices downward, the physical reality on the ground remains constrained. Several Gulf nations have already begun curbing output due to shipping hazards and strategic pivots:

To combat these supply shocks, the Trump administration is reportedly weighing aggressive counter-measures, including the release of emergency crude stockpiles and the potential easing of energy sanctions on Russia to increase global flow.

Market Outlook: Sustained Volatility
Analysts suggest that while the immediate "war premium" has softened, the floor remains unstable. Tony Sycamore of IG Market noted that crude is likely to oscillate wildly between $75 and $105 as the market digests contradictory headlines.

While the G7 has signaled a readiness to intervene, no firm commitment to a coordinated reserve release has been made yet. Investors remain on high alert, balancing the hope of a diplomatic breakthrough against the IRGC's threats to the world's most vital energy arteries.