In late morning trading across Asian markets, the benchmark Brent crude fell by about 6.5 percent to $92.46 per barrel, while West Texas Intermediate (also known as Nymex Light Sweet) dropped roughly 7 percent to $88.15.
The decline followed Trump’s statement on social media warning Iran against disrupting traffic through the strategically important Strait of Hormuz, a narrow maritime passage through which about one-fifth of the world’s oil supply moves.
Trump said the United States would respond forcefully if Iran attempted to halt energy shipments through the waterway. His comments appeared to reassure traders who had been concerned about a prolonged disruption to global oil supplies.
Oil prices had surged close to $120 per barrel on Monday after fears intensified that escalating hostilities involving the United States, Israel and Iran could significantly affect crude shipments from the Middle East. However, the market cooled after Trump suggested the military action might be short-lived.
Speaking during a news conference in Florida, he indicated the conflict could end soon, describing recent developments as a temporary episode.
Market analysts say the sharp drop in prices reflects a brief easing of anxiety among traders, though uncertainty remains high. Alberto Bellorin of the investment firm InterCapital Energy said the market was experiencing a “total tug-of-war” between fears of escalation and hopes for de-escalation.
According to Bellorin, oil trading is likely to remain highly sensitive to developments in the conflict, with prices expected to spike if tensions worsen and fall if diplomatic signals point toward resolution.
Despite Tuesday’s decline, crude prices remain significantly higher than they were before recent military strikes. Analysts estimate that oil is still trading roughly 20 percent above levels seen before the United States and Israel launched airstrikes on Iran just over a week ago.
Park Kee Hyun of the S Rajaratnam School of International Studies said the market would remain volatile because shipping companies and energy traders are likely to add risk premiums to account for potential disruptions in the region.
He noted that while Trump’s remarks might signal hopes for a quicker end to the conflict, investors will be watching closely to see whether developments on the ground actually support that outlook.
Asian Markets Rebound
The easing of oil price pressures helped lift stock markets across Asia after the previous day’s sharp losses. Investors had earlier worried that prolonged disruptions to Gulf oil shipments could drive inflation higher and prompt central banks to maintain elevated interest rates.
Japan’s benchmark Nikkei 225 rose by 2.7 percent, while Hong Kong’s Hang Seng Index gained about 2 percent. South Korea’s KOSPI posted the largest increase, climbing roughly 5.5 percent.
G7 Discusses Energy Supply Measures
The sharp swings in oil prices also prompted discussions among major economies. Leaders of the Group of Seven (G7) held talks with the International Energy Agency to assess possible steps to stabilise global energy supplies.
While the meeting ended without a final decision on releasing oil from strategic reserves, the option remained under consideration as part of contingency planning.
The United Kingdom’s Chancellor of the Exchequer, Rachel Reeves, said the UK had urged for immediate de-escalation in the Middle East and emphasised the need to ensure the security of shipping in the region.
Reeves also indicated that Britain would support a coordinated release of emergency oil reserves if global supply disruptions intensified.
With tensions in the Middle East continuing to influence markets, analysts warn that oil prices are likely to remain highly volatile in the coming weeks as traders react to each development in the conflict.