Oil prices declined on Tuesday following a peak not seen in over three years during the previous session, as U.S. President Donald Trump suggested that the conflict in the Middle East might conclude shortly, alleviating worries regarding extended interruptions to global oil supplies. International Brent crude experienced a decline of nearly 11%, settling at $88.36 per barrel at 9:25 p.m. on Monday, while U.S. crude saw a decrease of over 10%, reaching $85.17 per barrel. The pronounced downturns followed a significant rise in oil prices, which had exceeded $100 earlier in the day. Oil prices experienced a significant increase, surpassing the $100 per barrel mark on Monday. The session highs reached $119.50 for Brent and $119.48 for WTI, marking the highest levels since mid-2022. This surge can be attributed to supply cuts implemented by Saudi Arabia and other producers amid the escalating U.S.-Israeli conflict with Iran, which has raised concerns about potential major disruptions to global supplies.

Prices subsequently declined following a conversation between Russian President Vladimir Putin and Trump, during which proposals for a swift resolution to the Iran conflict were discussed, as reported by a Kremlin aide, alleviating worries regarding a sustained supply interruption. In an interview on Monday, Trump expressed his belief that the war against Iran “is very complete” and asserted that Washington was “very far ahead” of his initial estimate of a four- to five-week timeframe. In reaction to statements made by Trump, the Revolutionary Guards of Iran declared their intention to “determine the end of the war” and asserted that Tehran would not permit “one litre of oil” to be exported from the region should U.S. and Israeli assaults persist, as reported, referencing the spokesperson for the IRGC.

However, those remarks failed to elevate prices, which remained under pressure due to Trump’s contemplation of relaxing oil sanctions on Russia and the potential release of emergency crude stockpiles. This is part of a broader set of options intended to address the rising global oil prices in the context of the Iran conflict, as reported by multiple sources. Considering the developments of the last 24 hours, crude oil is anticipated to exhibit significant volatility, fluctuating within a broad range of approximately $75 to $105 in the upcoming sessions,” stated Tony Sycamore.

Gulf oil producers have initiated output reductions in response to the disruptions in shipping within the region caused by the U.S.-Israeli conflict with Iran. Over the weekend, Iraq reduced production at its primary southern oilfields by 70% to 1.3 million barrels per day, while Kuwait Petroleum Corporation also commenced output reductions and declared force majeure. In a continuation of the reductions, Saudi Arabia has commenced a decrease in production, according to sources on Monday. On Monday, G7 nations indicated their readiness to take “necessary measures” in reaction to the rising global oil prices, yet they refrained from pledging to release emergency reserves.