Global oil prices dropped sharply on Tuesday after Donald Trump suggested that the escalating conflict in the Middle East could end sooner than expected.
Benchmark crude prices fell by about seven percent after surging to a more than three-year high during the previous trading session, when fears of supply disruptions pushed markets higher.
International benchmark Brent crude declined by $6.75, or 6.8 percent, to $92.21 per barrel, while U.S. benchmark West Texas Intermediate crude dropped $6.41, or 6.8 percent, to $88.36 per barrel.
Both contracts had earlier fallen by as much as 11 percent as traders reacted to Trump’s remarks that the war linked to Iran could be resolved quickly, easing concerns over long-term disruptions to global oil supplies.
Oil markets have been highly volatile since the conflict intensified, particularly due to risks around the Strait of Hormuz, a strategic shipping route through which roughly one-fifth of the world’s oil supply passes.
The war has already disrupted tanker movements in the narrow waterway, raising fears that prolonged fighting could severely impact global energy supplies.
Meanwhile, leaders of the Group of Seven (G7) major economies have said they are prepared to respond if the surge in oil prices threatens global economic stability.
However, the group has not yet decided to release crude from strategic petroleum reserves.
Energy analysts say the market remains extremely sensitive to developments in the conflict, with prices likely to fluctuate depending on signs of either escalation or de-escalation in the region.
