Oil prices fall 25% after soaring to 4-year highs as Trump says war is ‘very complete’
Oil prices fell more than 25% intraday on Monday after a wild overnight move late Sunday sent prices to a four-year high amid a slew of escalatory headlines over the weekend related to the US-Iran conflict, which rocked international markets at the start of the week.
Futures on international pricing benchmark Brent crude (BZ=F) and US benchmark West Texas Intermediate crude (CL=F) both jumped more than 25% to briefly top $119 per barrel in overnight trading on Sunday.
By the market close on Monday, Brent had pared those gains to trade around $89, and WTI oil prices had fallen back to $85 a barrel after President Trump said the war could be over soon. Brent crude and WTI crude are still up roughly 23% and 28%, respectively, since the conflict began.
In comments to CBS News on Monday afternoon, Trump said the war in Iran is “very complete, pretty much,” and that the US is “very far” ahead of the timelines the military had projected.
The US and Israel began air strikes against Iran on Feb. 28; the week after, prices notched their largest weekly gain since at least 1985.
Critically, the conflict has sent tanker traffic through the Strait of Hormuz to a standstill. Roughly 20 million barrels of oil per day, or a fifth of the world’s supply of seaborne crude, crosses the waterway connecting the Persian Gulf to the wider international market every day. Data from Vortexa shows that roughly 16 million bpd of oil has been stranded behind the strait and cut off from the global market.
Macquarie strategist Vikas Dwivedi wrote in a recent client note, “A few weeks of Hormuz closure will create a domino effect of events that could push crude to $150 or higher.” The surge in oil prices has also begun to affect Americans at the pump. The national average price of gasoline was $3.478 per gallon on Monday, 16% above the $2.997 average a week prior.
Moderating oil’s meteoric rise, Reuters reported Monday morning that President Trump is considering a range of measures to put a lid on oil prices in the US, including releases from the country’s strategic petroleum reserve, oil export curbs, and a potential waiver of the Jones Act, which says domestic shipments must be undertaken on US-owned, US-flagged, and US-crewed ships, adding significant cost.
The Group of Seven nations met early Monday morning to discuss potential drawdowns from member countries’ strategic petroleum reserves, but ultimately decided to hold off.
In the Middle East, the conflict continues to roar on.
In the week since the US and Israeli air strikes began, what started as a localized conflict focused on destroying Iran’s nuclear capacity and potentially inciting regime change has widened out into a war that has engulfed the Middle East.
Airports, apartment buildings, military bases, and other infrastructure throughout Saudi Arabia, the United Arab Emirates, Bahrain, Oman, and a host of other countries have all been subject to missiles and drone strikes by Iran. The skies above Iran blackened over the weekend after fuel depots near the cities of Tehran and Kharaj were hit by air strikes.
The conflict has also increasingly turned toward energy infrastructure throughout the region, threatening even further a supply chain already pushed to its limits.
Bahrain’s Bapco Energies refinery and Qatar’s Ras Laffan LNG complex have declared force majeure. Saudi Arabia’s Ras Tanura refinery has been taken offline. Oil tankers in the Persian Gulf have been struck by missiles and drones, and Iran’s Revolutionary Guard has threatened violence against any ship that attempts to cross the strait, even as it declares the passage nominally “open.”
Flames and smoke rise from an oil storage facility struck as attacks hit the city during the US-Israeli military campaign in Tehran, Iran, late Saturday, March 7, 2026. (Alireza Sotakbar/ISNA via AP) ·ASSOCIATED PRESS
With nowhere to send their oil, producers have begun cutting back, signaling a deeper lack of supply to the market. Iraq has now cut 60% of its oil production, according to Bloomberg, and Kuwait has also begun shutting down production. If the Strait of Hormuz remains unnavigable, production cuts would likely rise to 3.3 million bpd by day eight, to 3.8 million bpd by day 15, and to 4.7 million bpd by day 18, according to research from JPMorgan Chase analysts.
On Monday morning, Saudi Aramco announced it had begun scaling back production in two of its oil fields, the first confirmed shut-ins from Saudi Arabia, the world’s second-largest oil producer.
Reports over the weekend indicate that Iran has also set its sights on critical civilian infrastructure, as Bahrain’s Ministry of Interior said a major desalination plant had been damaged in an Iranian drone strike. Desalination plants are essential in the Middle East to provide drinking water throughout the region.
In a client note on Friday, Goldman Sachs economists wrote that if oil prices were to “temporarily rise to $100/bbl,” the bank estimates global headline inflation could rise by 0.7 percentage points and global growth could slow by 0.4 percentage points.
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.
