Brent futures were down $6.51, or 6.6%, at $92.45 a barrel by 0018 GMT, while U.S. West Texas Intermediate (WTI) crude was down $6.12, or 6.5%, at $88.65.
Oil prices rose above $100 a barrel on Monday, to $119.50 for Brent and $119.48 for WTI, the highest since mid-2022, as supply cuts from Saudi Arabia and other producers amid the escalating U.S.-Israeli war with Iran raised fears of major disruptions.
Prices retreated after Russian President Vladimir Putin called Trump and shared proposals aimed at a quick resolution to the Iran conflict, easing concerns about a prolonged supply disruption, according to a Kremlin aide.
Trump said in an interview with CBS News on Monday that he thinks the war against Iran is “pretty complete” and that Washington was “far ahead” of its initial estimate of four to five weeks.
In response to Trump, Iran’s Revolutionary Guards (IRGC) said they would “determine the end of the war,” state media reported on Tuesday, citing an IRGC spokesman.
But the comments did not lift prices, which have also been under pressure as Trump considers easing oil sanctions on Russia and releasing emergency crude stocks as part of options aimed at stemming a rise in global oil prices amid the Iran conflict, according to multiple sources. “Given the events of the past 24 hours, I expect crude oil to remain very volatile, trading in a wide range between $75ish and $105ish in the coming sessions,” Tony Sycamore, IG Markets analyst, said in a note.
Gulf oil producers have begun cutting output as the US-Israeli war against Iran has halted shipments in the region. Over the weekend, Iraq cut production at its main southern oil fields by 70% to 1.3 million barrels a day while Kuwait Petroleum Corporation also began cutting output and announced layoffs.
In addition to the cuts, Saudi Arabia has now started cutting production, the sources said on Monday.
The G7 nations said on Monday they were ready to implement “necessary measures” in response to rising global oil prices but scaled back pledges to release emergency reserves.
