Global oil prices dropped below $90 per barrel on Monday after Donald Trump suggested that the ongoing war involving the United States, Israel, and Iran could end sooner than expected.
The decline came after oil prices had surged to nearly $120 per barrel earlier in the day amid fears of supply disruptions linked to the conflict.
Oil Retreats After Sharp Surge
Both Brent Crude and West Texas Intermediate fell back below the $90 mark following the remarks by Trump, who said the war was “very far ahead of schedule” and “very complete, pretty much.”
Earlier on Monday, Brent crude climbed to $119 per barrel, its highest level since 2022, while the U.S. benchmark also surged past that level before retreating to about $85 per barrel.
Global Stocks Rebound
The easing oil prices helped global markets recover from earlier losses.
On Nasdaq Composite, shares gained 1.4 per cent, while the Dow Jones Industrial Average rose by 239 points after falling nearly 900 points earlier in the trading session.
Investors had been concerned that the spike in energy prices could worsen inflation and slow global economic growth.
G7 Signals Possible Oil Reserve Release
Meanwhile, finance ministers of the Group of Seven said the bloc was prepared to release petroleum from strategic reserves if necessary to stabilise global energy markets.
The remarks were made after an emergency meeting as oil producers in the Gulf reduced output amid shipping disruptions in the Strait of Hormuz, a key route for global oil shipments.
Leadership Change In Iran
The geopolitical tension intensified after the death of Iran’s Supreme Leader Ali Khamenei in joint U.S.-Israeli strikes.
His son, Mojtaba Khamenei, was later named as his successor, marking the first quasi-dynastic leadership transition in the history of the Islamic Republic.
While Tehran defended the appointment and called for unity, Trump criticised the move, saying Iran had made a “big mistake.”
Global Reactions
Russia threw its support behind Iran’s new leadership, with Vladimir Putin congratulating Mojtaba Khamenei and pledging Moscow’s “unwavering support.”
Meanwhile, Keir Starmer warned that prolonged hostilities in the Middle East could disrupt global oil supplies and place additional strain on international markets.
The conflict has already disrupted shipping through the Strait of Hormuz and triggered sharp volatility in global energy prices, raising concerns about broader geopolitical and economic consequences if the war spreads further across the region.
