Just in: Oil prices fall after early spike on US strikes in Iran

DDM News

Oil prices dropped sharply Monday after initially spiking in response to US military strikes on Iranian targets, as energy markets assessed the likelihood of further instability in the Gulf region.

Diaspora Digital Media (DDM) observed that despite early gains of more than 6%, traders appeared to discount the long-term impact of the strikes, signaling confidence that supply disruptions may be limited in scope or duration.

US crude rose as high as $78.40 per barrel Sunday night, a 6.2% jump. But by 10:40 a.m. ET Monday, it had fallen roughly 1%, trading at $73.15 a barrel. Brent crude, the international benchmark, mirrored the decline with a similar 1% drop after its initial surge.

The market response has prompted reactions from policymakers. Former President Donald Trump, posting on Truth Social, warned against artificially inflating prices.

“EVERYONE, KEEP OIL PRICES DOWN,” Trump wrote. “I’M WATCHING! YOU’RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON’T DO IT!”

The volatility follows fears that Iran could retaliate by attempting to shut down the Strait of Hormuz, a vital maritime passage through which nearly 20 million barrels of oil flow daily—roughly 20% of global consumption.

Still, analysts caution against overreaction. Bob McNally, president of Rapidan Energy Group, told CNN that the market is used to geopolitical bluffs that don’t translate into real supply cuts.

“Traders have seen a lot of false alarms when it comes to geopolitical disruption risk in the oil market,” McNally said. “Unless there’s a material interruption in Gulf energy, production, or flows, I think any further spikes will be contained.”

The White House confirmed it is closely monitoring global energy markets and coordinating with allies to ensure stability and continuity of supply.

As of now, no official reports of supply chain disruption have emerged, and major shipping lanes through the Gulf remain operational.

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