Oil prices witness dramatic ‘crash’ as Brent crude plunges from $116 peak

WEB DESK: Global oil markets experienced a dramatic reversal on Tuesday as prices tumbled sharply after days of intense volatility linked to rising tensions in the Middle East. Brent Crude fell from a near-record high of $116 per barrel to roughly $97 within hours, marking one of the steepest intraday declines in recent months.

According to The Economic Times, the sudden downturn follows a turbulent trading period during which crude prices surged amid fears that the expanding conflict in the region could severely disrupt global energy supplies. Only a day earlier, Brent had climbed to almost $120 per barrel its highest level since the outbreak of the Russian invasion of Ukraine as traders priced in the possibility of major shipping disruptions across the Gulf.

Market volatility and the ‘Trump Effect’

Analysts say the sharp correction was largely triggered by remarks from Donald Trump late Monday night. Speaking from Florida, the U.S. president suggested that the current confrontation with Iran could be resolved “very soon”, while also signalling plans to ensure the continued safety of oil tanker traffic through the critical Strait of Hormuz.

Those comments rapidly altered market sentiment, prompting traders to unwind positions and secure profits following Monday’s dramatic surge.

“What we are seeing is the war premium evaporating almost as quickly as it arrived,” said a senior commodities strategist in London. “Markets had been pricing in the risk of a full blockade of the Gulf. Those fears have been significantly tempered by the latest diplomatic and military signals.”

G7 signals strategic reserve support

Additional downward pressure came after finance ministers from the Group of Seven indicated they were prepared to coordinate the release of emergency crude supplies from strategic petroleum reserves if required.

The group said it “stands ready” to act to stabilise energy markets following a roughly 30pc surge in oil prices earlier this month, a move aimed at preventing renewed inflationary pressure on already strained global economies.

Despite Tuesday’s retreat, analysts caution that the market remains highly fragile. Prices near $97 still sit well above the $65–$75 range seen at the beginning of the year, meaning energy costs remain elevated for both consumers and industry.

The sudden drop may offer temporary relief to households across United Kingdom and Europe grappling with rising living costs, though fuel retailers have yet to indicate whether the decline will be reflected at petrol pumps in the coming days.