Reported from the source

Quick summary: Oil prices plummeted 10% on Tuesday following U.S. President Donald Trump’s warning that Iran would face severe retaliation if it attempted to halt oil flows through the Strait of Hormuz. Trump also suggested the conflict with Iran could conclude soon, leading to market optimism and a significant drop in crude prices after they had surged past $100 on Monday.

International Brent crude fell nearly 11% to $88.36 per barrel, while U.S. crude oil dropped over 10% to $85.17 per barrel. The declines occurred after President Trump stated on Truth Social that if Iran ‘stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far.’ He also called this a ‘gift’ to nations heavily using the Strait. The Strait of Hormuz, located between Oman and Iran, is a critical transit route, through which approximately 13 million barrels passed in 2025, accounting for about 31% of global seaborne oil flows. Earlier, a spokesperson for Iran’s Ministry of Foreign Affairs had warned oil tankers transiting the Strait to ‘be very careful.’ Trump also told CBS News he was ‘thinking about taking it over’ and stated at a press conference that the war against Iran would end ‘very soon,’ causing oil prices to drop. These comments have reportedly ‘soothed nerves’ regarding potential energy supply shocks. Bob McNally, president at Rapidan Energy Group, noted ‘a lot of optimism in the market’ due to what he called ‘verbal intervention from the President,’ despite the ‘completely calamitous and unexpected’ disruption of the Strait. However, Andy Lipow, President of Lipow Oil Associates, cautioned that it is ‘still too early to draw concrete conclusions,’ awaiting Iran’s response. Separately, G7 energy ministers are scheduled to hold a virtual meeting to discuss a potential release of emergency oil reserves to ease supply disruptions from the Iran war. Sources indicate the U.S. believes a joint release of 300 million to 400 million barrels, representing 25% to 30% of the group’s combined 1.2 billion-barrel reserves, would be appropriate.

Source: www.cnbc.com