President Trump told reporters Wednesday that the United States is in the “final stages” of negotiations with Iran, triggering an immediate plunge in global oil prices.
Crude markets tumbled as traders priced in the possibility of a deal that would reopen energy flows through the Strait of Hormuz. This reaction underscores the market leverage Trump has cultivated: applying military pressure while pursuing diplomacy, and threatening consequences for Iran’s refusal to compromise.
Oil prices slid hard following Trump’s statement. West Texas Intermediate futures fell more than 6% to $97.74 per barrel by 12:58 p.m. ET, while Brent futures dropped nearly 6% to $104.62. The rapid shift demonstrated how swiftly traders responded to the potential for a diplomatic breakthrough that could ease the global supply crunch and restore critical shipments through the Strait of Hormuz.
Trump’s earlier decision to delay renewed strikes against Iran after Gulf Arab allies requested additional negotiation time highlighted his strategy: applying sufficient pressure on Tehran to signal imminent progress in resolving the energy crisis.
Oil prices plummeted further after Trump’s comments raised hopes for an immediate restart of energy flows through the Strait of Hormuz. West Texas Intermediate fell 5.7% to settle near $98 per barrel, while Brent slid 5.6% to settle near $105.02.
Trump emphasized that either a deal would be reached or the United States would take actions described as “unpleasant,” though he expressed hope this outcome would not occur. Traders have repeatedly priced in abrupt de-escalation scenarios, including agreements that would reopen the Strait of Hormuz and free millions of barrels trapped in the Persian Gulf.
Iran has accused Trump of preparing to restart hostilities and warned that any renewed strikes could trigger retaliation extending far beyond the Middle East. This dynamic explains the volatile movements in global oil markets.
Market participants are not evaluating routine diplomacy but a high-stakes standoff where a deal could provide relief while failure risks fresh military escalation. No peace agreement has been announced, and Iran remains untrustworthy. Analysis indicates that prolonged closure of the Strait of Hormuz would pose the single greatest threat to global energy markets in decades—curtailing over 11 million barrels per day of Gulf crude production and blocking more than 80 million tonnes annually of LNG supply.
Under an optimistic scenario where the Strait reopens by June, Brent crude could ease to around $80 per barrel by late 2026 and decline further in 2027 as markets return to oversupply. However, prolonged disruptions might push Brent crude toward $200 per barrel by end-2026, with diesel and jet fuel prices potentially reaching $300 per barrel in major refining centers—a stark difference between relief for American families and a global energy crisis.
The crisis is not over. But Trump’s strategy of compelling Iran to face consequences has now become strong enough to move global energy markets on the possibility of a deal.
