Global energy markets experienced extreme volatility following a series of conflicting signals and aggressive rhetoric from President Donald Trump regarding the ongoing conflict with Iran. Oil prices fell in early trading on Tuesday, having soared to almost $120 a barrel at one point on Monday. The significant drop comes as Donald Trump says the Iran war will be over “pretty quickly”, but the US has not won enough yet.
Trump has threatened to inflict “death, fire, and fury” upon Iran if it does not allow oil shipments from the Persian Gulf to begin flowing again. In a post on Truth Social Monday night, the US president vowed to completely extirpate the Islamic Republic unless it fully re-opens the Strait of Hormuz- a crucial lane for oil exports from Iraq, Kuwait, Saudi Arabia, and other Gulf petrostates.
However, the Iranian military has declared the Strait of Hormuz will be effectively closed and threatening to attack any ships that pass. This move has pushed the price of crude above $110 a barrel for the first time in three and a half years.
The Strait of Hormuz is a narrow waterway running between Iran and the Arabian Peninsula, which links the oil-exporting ports of the Persian Gulf to the Indian Ocean and global markets. Last week, the US government offered to provide insurance for oil tankers in the region; however, prices have continued to soar, as reported by the Independent.
According to analysts, if the strait remains closed for more than a week, the result will be calamitous-not just for oil shipments but for global food supplies. In this connection, Trump said: “If they do play that game, we’re going to hit them at a level that they have not seen before.”
Global oil prices fell early Tuesday morning in Asia, with Brent was down by about 8.5% at $92.50 a barrel. US crude also fell around 9% to $88.60 a barrel, though prices are still about 30% higher than they were at the start of the conflict.
Nonetheless, the volatility has caused energy prices to rise across the globe. This includes the US where an electorate concerned about the cost of living faces these hikes less than eight months before the 2026 midterm elections.
