Oil prices surged past $100 a barrel on Monday, hitting session highs of $119.50 for Brent and $119.48 for WTI, their highest since mid-2022, as supply cuts by Saudi Arabia and other producers during the expanding U.S.-Israeli war with Iran stoked fears of major disruptions to global supplies.Prices later retreated after Russian President Vladimir Putin held a call with Trump and shared proposals aimed at a quick settlement to the Iran war, according to a Kremlin aide, easing concerns about a prolonged supply disruption.
Trump said on Monday in a CBS News interview that he thinks the war against Iran “is very complete” and that Washington was “very far ahead” of his initial four- to five-week estimated timeframe.
In response to Trump, Iran’s Revolutionary Guards (IRGC) said they would “determine the end of the war” and that Tehran would not allow “one litre of oil” to be exported from the region if U.S. and Israeli attacks continued, state media reported on Tuesday citing IRGC’s spokesperson.
But those comments did not lift prices, which were also under pressure because Trump is considering easing oil sanctions on Russia and releasing emergency crude stockpiles as part of a package of options aimed at curbing spiking global oil prices amid the Iran conflict, according to multiple sources. “Taking the events of the past 24 hours into account, I expect crude oil to remain highly volatile, trading within a wide range between $75ish and $105ish in the sessions ahead,” Tony Sycamore, IG market analyst, said in a note.
Gulf oil producers have begun cutting output as the U.S.-Israeli war on Iran disrupted shipping in the region. Over the weekend, Iraq slashed production at its main southern oilfields by 70% to 1.3 million barrels per day while Kuwait Petroleum Corporation also began reducing output and declared force majeure.
Adding to the cuts, Saudi Arabia has now begun trimming production, sources said on Monday.
G7 nations said on Monday they were prepared to implement “necessary measures” in response to surging global oil prices but stopped short of committing to release emergency reserves.