TLDR
- Brent crude tumbled 6–7% to approximately $92 Tuesday following Monday’s spike above $119
- Trump indicated the Iran conflict was progressing faster than his original 4–5 week projection
- Iran’s IRGC countered with claims they control the war’s conclusion and warned of regional export blockades
- G7 members prepared to deploy emergency reserves while choosing to wait
- Goldman Sachs maintained its $66/barrel Brent projection for Q4 2026 amid evolving circumstances
Energy markets experienced dramatic volatility this week as competing messages from Washington and Tehran created uncertainty around supply security. Brent crude tumbled approximately 7% Tuesday to settle near $92 per barrel, following Monday’s rally that pushed prices above $100 for the first time since mid-2022.
Monday’s rally stemmed from growing supply concerns. Production cuts by Saudi Arabia and allied producers, combined with the expanding U.S.-Israeli military campaign against Iran, drove Brent to $119.50 and West Texas Intermediate to $119.48. Dow Jones Market Data recorded this as the largest single-day intraday fluctuation in history.
The downturn began after Trump’s Monday interview with CBS News, where he characterized the conflict as “very complete” and stated operations were running “very far ahead” of his originally projected four-to-five week duration. These remarks alone shifted market sentiment and initiated the oil selloff.
Russian President Vladimir Putin’s Monday conversation with Trump, which included proposals for rapid conflict resolution, reinforced the de-escalation narrative and accelerated the price decline.
Tehran offered a different perspective on the conflict’s trajectory.
Iran Pushes Back
Iran’s Islamic Revolutionary Guard Corps declared Tuesday that they would “determine the end of the war,” rejecting U.S. characterizations. The IRGC warned that continued American and Israeli military operations would result in a complete blockade of regional oil shipments.
Iran’s Foreign Minister Abbas Araghchi refused the possibility of U.S. negotiations during a PBS News interview, according to Wall Street Journal reporting.
Trump issued a Truth Social response, cautioning Iran that any attempt to obstruct the Strait of Hormuz would trigger U.S. retaliation “twenty times harder than they have been hit thus far.”
Market observers questioned whether traders were overcompensating in both directions. “While there was an overreaction to the upside yesterday, we think there is an overreaction to the downside today,” noted Suvro Sarkar, energy sector team lead at DBS Bank.
Sarkar emphasized that Murban and Dubai oil grades continued trading above $100 per barrel, indicating that physical supply fundamentals remained largely unchanged.
What Governments Are Doing
G7 finance ministers convened Monday to evaluate releasing strategic petroleum reserves. While they declined immediate action, their statement confirmed they “stand ready to take necessary measures,” including potential stockpile deployments.
Trump administration officials are exploring the possibility of relaxing Russian oil sanctions as part of a broader price stabilization strategy. Multiple sources confirmed this option remains under active consideration.
Priyanka Sachdeva, analyst at Phillip Nova, explained that the convergence of these developments — potential Russian sanctions adjustments, G7 reserve readiness, and Trump’s timeline comments — provided sufficient rationale for traders to unwind their aggressive long positions.
Goldman Sachs maintained its existing price outlook. The investment bank continues projecting Brent at $66 per barrel and WTI at $62 per barrel for the fourth quarter of 2026, acknowledging the rapidly changing dynamics.
The IRGC’s Tuesday statement represents the most recent indication that hostilities remain active.
