Oil prices fell on Tuesday as US President Donald Trump predicted the war in the Middle East could end soon, easing concerns about prolonged disruptions to global oil supplies.
Brent futures fell $6.51, or 6.6%, to $92.45 a barrel at 0018 GMT, while U.S. West Texas Intermediate crude was down $6.12, or 6.5%, to $88.65.
Oil supply cuts
Oil prices surged past $100 a barrel on Monday, hitting session highs of $119.50 for Brent and $119.48 for WTI. This was their highest since mid-2022, as supply cuts by Saudi Arabia and other producers during the expanding US-Israeli war with Iran stoked fears of major disruptions to global supplies.
Prices later retreated after Russian President Vladimir Putin spoke with US President Donald Trump. A Kremlin aide said Putin shared proposals for a quick settlement to the conflict, which eased concerns about a prolonged supply disruption.
However, the Kremlin said the possibility of lifting US sanctions on Russian oil had not been discussed in any detail.
Vital Strait of Hormuz remains shut
The war has effectively shut the Strait of Hormuz. Tankers are unable to sail for more than a week and producers have been forced to halt pumping as storage facilities fill.
The strait is the world’s most important oil export route, connecting the biggest Gulf oil producers with the Gulf of Oman and the Arabian Sea.
The Islamic Revolutionary Guards Corps said it would not allow any oil to leave the region if attacks from the US and Israel continue.
Conflict disrupts shipping in the region
Gulf oil producers have begun cutting output as the conflict disrupted shipping in the region.
G7 nations said on Monday they were prepared to implement “necessary measures” in response to surging global oil prices, but stopped short of committing to the release of emergency reserves.
Efforts to ease oil shortage
After speaking with Putin, Trump said the US would waive oil-related sanctions on “some countries” to ease the shortage.
According to multiple sources, that could mean a further easing of sanctions on Russian oil. Other options include a possible release of oil from strategic reserves or restricting US exports, sources said.
