The global energy market saw a dramatic cool-down on Tuesday after Donald Trump characterized the military campaign against Iran as being in its final stages. Brent crude, which had recently skyrocketed to a peak of $119.50 per barrel, tumbled back toward the $91 mark following the President’s reassuring comments. This shift marks one of the most significant 24-hour reversals in oil trading history, providing a temporary reprieve for a global economy on edge.
The volatility was primarily driven by the effective closure of the Strait of Hormuz, where nearly 20% of the world’s seaborne oil and gas tankers were blocked from passing for an entire week. Iran’s Revolutionary Guards had issued a defiant “not one litre” policy, vowing to halt all exports if US and Israeli strikes on their territory continued. This standoff had propelled energy costs to four-year highs, sparking fears of a localized supply vacuum.
In a move to lower fuel costs, Trump indicated that Washington would waive some oil-related sanctions to increase global availability. This follows a period of intense diplomacy, including a “business-like” call with Vladimir Putin, suggesting a shift in how the US manages energy alliances. Trump told reporters that the priority is to keep “sanctions off until the strait is up” and functioning normally for international shipping.
The surge in costs had already forced several governments across Europe and Asia to take drastic actions to protect their national economies. Countries such as South Korea, Thailand, and Croatia have introduced fuel price caps, while Bangladesh closed its universities to conserve electricity. These measures highlight the extreme vulnerability of national stability to regional instability in the Middle East.
While the markets have calmed for now, the future of the region remains uncertain as Trump also threatened Iran with even harsher military action if they disrupt oil flows again. France has proposed an international maritime coalition to provide naval escorts for tankers once the most intense fighting has subsided. Success in this mission will be the deciding factor in whether the recent decline in oil prices is sustainable.