Energy markets witnessed a sudden reversal on Tuesday after Donald Trump asserted that the Iranian military has “nothing left” following a week of intense strikes. Brent crude, which briefly touched a multi-year high of $119.50, tumbled back toward $90 as the President moved to project confidence in a swift resolution. The shift reflects a market desperate for stability after the US-Israel coalition targeted key infrastructure in Tehran and beyond.
The initial price surge was fueled by the effective closure of the Strait of Hormuz, the world’s most critical oil chokepoint. With 20% of global supply at risk, the Iranian Revolutionary Guard (IRGC) had vowed a total blockade, warning that not one litre of fuel would leave the region. This standoff caused a week of paralysis in maritime trade, driving prices to levels not seen since the peak of the 2022 energy crisis.
Trump’s rhetoric has played a central role in cooling investor fears, with the President describing the war as “very complete, pretty much.” Despite this, he maintained a credible threat of force, stating that any disruption to shipping would trigger a response “twenty times harder” than previous strikes. This aggressive posture is aimed at ensuring the strait remains open even as military operations continue in the region.
The global economic toll of the conflict has forced several nations to adopt emergency conservation measures to protect their domestic markets. From university closures in Bangladesh to fuel price caps in Croatia and Hungary, the impact has been felt far beyond the Middle East. These governments are now watching closely to see if the recent price drop will translate into long-term relief for their domestic economies.
Looking ahead, the administration appears to be exploring diplomatic and logistical workarounds to bypass the regional deadlock and lower costs. This includes a 30-day waiver for Indian refiners to source Russian oil and potential naval escort programs for commercial tankers. The coming days will determine if the “short-term excursion” described by Trump truly leads to a lasting reopening of the global energy lifelines.