What goes up must come down.
Oil surged 28% on Monday to hit a near four-year high of nearly $120 per barrel. A day later, prices have plunged back below $90.
Oil prices plunged after US President Trump made statements hinting at an end to the war.
The price of West Texas Intermediate crude was last at $89.09 per barrel, down 5.8%, while Brent was down 5.4% at $93.70 a barrel.
Brent had fallen to $88.10 per barrel earlier in the session, while WTI had slipped to $84.45.
Oil prices plunge amidst Trump’s statements
In comments to CBS News, Trump said the war in Iran is “very complete, pretty much,” and that the US is “very far” ahead of the timelines the military had projected.
“Tell these tankers to get themselves, get to it, we have wiped out most of their launchers,” Trump said.
“These ships should go through the Strait of Hormuz and show some guts, there’s nothing to be afraid of. [The Iranians] have no navy, we sunk all their ships.”
Trump’s tolerance level for oil prices is now known to the market.
In the previous session, ICE Brent experienced a significant surge, climbing by as much as 28% to nearly $120 per barrel, its highest level since mid-2022.
This jump was triggered by the shutdown of upstream oil production in the Persian Gulf, with no clear indication of when oil flows through the Strait of Hormuz would resume.
Oil prices dropped sharply later in the session, with Brent briefly trading near $85 per barrel, due to reports that G-7 finance ministers were discussing a large release of oil from strategic reserves and President Trump’s comments suggesting a rapid end to the conflict.
“Trump’s words will only go so far. Ultimately, the market will need to see a resumption of oil flows through the Strait of Hormuz to sustain a move lower in oil prices,” Warren Patterson, head of commodities strategy at ING Group, said in a note.
“Failing that, we are unlikely to have seen the highs yet.”
G-7 considers record strategic oil release
G-7 finance ministers did not reach a decision on Monday, regarding a coordinated release of oil from reserves.
However, the group is reportedly scheduled to meet again today, where an agreement could potentially be reached for a coordinated release of 300-400 million barrels.
The coordinated releases of oil in 2022 totaled 182 million barrels. When factoring in independent releases, the total volume increased to 240 million barrels, establishing a record for coordinated releases.
“A large stock release could affect the forward curve,” Patterson added.
Expectations that reserves will eventually need to be refilled suggest this situation could create downward pressure on the short-term market (the front end) while simultaneously providing a basis for support later along the yield curve, he added.
Sanctions, supply cuts, and global stability
Trump’s administration also plans to temporarily ease oil-related sanctions on certain nations until oil shipments through the Strait of Hormuz resume.
Although he did not specify which countries would benefit, reports suggested that easing oil sanctions on Russia is under consideration by his administration.
“However, given that Russia has managed to circumvent sanctions relatively effectively in recent years, any easing will not materially increase supply,” Patterson added.
As oil prices rise, the West will find it increasingly difficult to overlook the economic incentive for Russia to reroute its crude through channels such as India, a reality underlined by the recent 30-day US waiver, according to Rystad Energy’s vice president of oil markets, Janiv Shah.
Restoring oil flows through the Strait of Hormuz is essential; prolonged restrictions will necessitate the shutting in of more upstream oil production.
Consequently, it will take a longer period to increase output once operations resume.
There have been several reports since last week regarding production shut-ins, which now include Saudi Arabia, in addition to Iraq, Kuwait, and the UAE.
Due to storage limitations, Persian Gulf producers are attempting to control supply by decreasing output from existing fields instead of immediately halting operations.
“Between the potential for massive Strategic Petroleum Reserve (SPR) releases and the eventual response from US shale, the world is searching for a stabilizer to absorb this shock,” Shah said.
“With refineries already curtailing throughput as a defensive measure, the focus has shifted entirely from profit margins to national energy security, making current oil prices a very tangible threat to global stability.”
https://invezz.com/news/2026/03/10/oil-slips-below-90-bbl-on-trumps-comments-has-the-rally-ended/
