Daijiworld Media Network - New York
New York, Mar 10: Global oil and gas prices dropped sharply on Tuesday after US President Donald Trump indicated that the war with Iran could be nearing an end.
Crude oil had surged close to $120 a barrel on Monday amid fears that the conflict could severely disrupt energy supplies from the Middle East. However, prices fell to around $92 after Trump said the war in Iran was “very complete, pretty much”, raising hopes that the conflict might not drag on.
Gas prices also declined, while stock markets across Europe and Asia rebounded. However, US markets opened slightly lower, with the S&P 500, Dow Jones and Nasdaq each slipping by about 0.5 per cent.
The chief executive of Saudi Arabia’s Aramco, Amin Nasser, warned of “catastrophic consequences” if the Strait of Hormuz — a key shipping route for global energy supplies — remains blocked. Nearly one-fifth of the world’s oil typically passes through the narrow waterway, but traffic has nearly halted since the conflict began more than a week ago.
Nasser said global oil stockpiles were already at their lowest levels in five years and that supply disruptions could accelerate their depletion. “The longer the disruption goes on, the more drastic the consequences for the global economy,” he said.
The International Energy Agency (IEA) on Tuesday held a second meeting with G7 nations to discuss options to stabilise the global oil market, including the possible release of emergency crude reserves from member countries.
Trump earlier told reporters in Florida that the military action was intended to eliminate threats and could be a “short-term excursion”. In a separate social media post, he warned Iran that any attempt to block oil shipments through the Strait of Hormuz would trigger a much stronger response from the United States.
In response, Iran’s Islamic Revolutionary Guard Corps said its armed forces would not allow “the export of a single litre of oil from the region”.
Brent crude briefly fell below $84 a barrel before rising again to around $91.72 on Tuesday. Despite the drop, prices remain nearly $20 higher than before the US-Israel conflict with Iran began on February 28, when Brent traded at about $73 a barrel.
Gas prices also eased, with UK month-ahead delivery falling sharply to 126p a therm from Monday’s peak of 171p.
Analysts said energy markets remain volatile despite the decline in prices. Alberto Bellorin, founder of oil and gas investment firm InterCapital Energy, said traders had been given a moment to “exhale”, but warned that oil trading would remain highly sensitive to developments in the conflict.
European stock markets rose on hopes of a quick end to the war, with London’s FTSE 100 gaining 1.2 per cent, Germany’s DAX climbing 1.9 per cent and France’s CAC 40 rising 1.4 per cent. In Asia, Japan’s Nikkei 225 ended 2.9 per cent higher, while South Korea’s Kospi surged 5.4 per cent.
Meanwhile, G7 nations said they were ready to take “necessary measures” to address global energy supply concerns if the conflict continues to disrupt oil flows.
Energy analysts said governments remain cautious about releasing strategic oil reserves too early, as they serve as a last line of defence during prolonged supply crises.