Oil Drops Below $90 As Trump Hints At Potential Conclusion To Iran Conflict

Oil prices dropped below $90 per barrel following Donald Trump’s indication that the US-Israeli conflict with Iran might conclude shortly.

On Monday, oil prices dropped below $90 per barrel, having previously surged to nearly $120, following remarks from United States President Donald Trump about a potential end to the war soon.

Brent crude and West Texas Intermediate prices have fallen back below $90 a barrel. Stocks on Wall Street finished the day with gains as oil prices softened.

Additionally, G7 finance ministers expressed that the group is “prepared” to release petroleum from emergency reserves. On Monday morning, the oil price climbed to $119, marking the highest point since 2022.

Stocks surged while oil prices declined following reports that Trump stated the US-Israeli conflict with Iran was “very far ahead of schedule” and “very complete, pretty much.”

Brent crude, the global oil benchmark, fell below $90 a barrel following the president’s remarks. It experienced a significant rise overnight, reaching its peak intraday level since the middle of 2022. The US benchmark fell to approximately $85 a barrel, having previously surged past $119.

Stocks began the session in a downward trend but reduced their losses as the decline in oil prices eased, ultimately rallying as the day came to a close following Trump’s recent comments. The Nasdaq Composite topped the indexes with an increase of 1.4 percent. The Dow industrials increased by 239 points after experiencing a decline of nearly 900 points during early trading.

A significant moment occurred when France’s Finance Minister announced that the Group of Seven advanced economies was ready to release strategic oil reserves to stabilize the global energy market if needed. The comments followed a remarkable gathering of the group, coinciding with Gulf oil producers reducing output due to shipping disruptions in the Strait of Hormuz.

The bond markets experienced volatility, as the 10-year US Treasury yield rose above 4.2 percent before pulling back to around 4.1 percent. The dollar declined as the day came to a close. Recently, investors have expressed concerns that the surge in energy prices might contribute to inflation and hinder growth, bringing the possibility of stagflation into focus.

On Monday, Trump cautioned that Iran erred significantly in selecting Mojtaba Khamenei as its new supreme leader, while Washington charged Tehran with holding the world hostage through its increasing military actions and threats to global energy supplies amid the intensifying conflict in the Middle East.

Trump consistently characterized Iran’s new leader as unacceptable and implied that he would struggle to maintain his position without US endorsement, a statement that Iranian officials denounced as meddling in their internal political affairs. On Monday, Trump suggested that the current war will not last long.

The leadership transition occurred shortly after the death of Ali Khamenei due to US-Israeli strikes, an event that significantly heightened tensions and initiated a succession process that resulted in the appointment of his son, Mojtaba, representing the first quasi-dynastic transfer of power in the Islamic Republic.

Iran defended the appointment, with its political and military establishment urging unity under the new leader as the conflict with Israel and its allies continued to escalate throughout the region.

The conflict had already interrupted energy shipments through the Strait of Hormuz and caused a significant increase in global oil prices, heightening concerns about wider geopolitical and economic repercussions if the war extended beyond Iran and Israel.

On Monday, Russia expressed its support for Iran’s new leadership, as President Vladimir Putin congratulated Mojtaba Khamenei and promised Moscow’s steadfast backing.

Putin characterized Russia as a dependable ally for Tehran during a period when the nation was confronting what he referred to as armed aggression.

British Prime Minister Keir Starmer cautioned that the conflict could lead to significant economic repercussions, noting that extended hostilities in the Middle East might disrupt global oil supplies and further burden already vulnerable international markets.