Oil prices fell more than 10% on Tuesday as markets anticipated the release of emergency oil reserves to deal with supply disruptions caused by the Iran war.
brent crude oilThe global benchmark dollar fell 10.47% to $88.60 per barrel by 10:59 a.m. ET. usa crude oil It fell 11.24% to $84.12 per barrel. The decline comes after crude oil prices soared to nearly $120 at one point on Monday.
The International Energy Agency will hold an extraordinary meeting on Tuesday to discuss the possible release of emergency stockpiles. More than 30 member countries are developed economies in Europe, North America, and Northeast Asia. Together they have reserves of 1.2 billion barrels of oil.
The Iran war caused the biggest supply disruption in oil history, according to Rapidan Energy analysis. Saudi Aramco’s CEO warned that war would have “catastrophic consequences” for the market.
“We have faced turmoil in the past, but this is the biggest crisis ever faced by the region’s oil and gas industry,” Aramco CEO Amin Nasser said on Tuesday.
Crude oil prices since the beginning of the year
President Donald Trump warned on Monday that if Iran tried to stop the flow of oil through the crucial Strait of Hormuz, it would “hit us 20 times harder.” Traffic in the strait has been severely disrupted as oil carriers park their ships fearing an attack by Iran.
“If Iran does anything to stop the flow of oil in the Strait of Hormuz, it will receive 20 times more damage from the United States,” Trump said in a post on Truth Social.
This strait, located between Oman and Iran, is an important shipping route for global energy markets. According to Kpler, about 13 million barrels passed through the waterway in 2025, accounting for about 31% of global offshore oil flows. It connects major Gulf producing countries such as Saudi Arabia, Iran, Iraq and the United Arab Emirates with the Gulf of Oman and the Arabian Sea.
Bob McNally, president of Rapidan Energy Group, said the market appears to be taking the view for now that the situation won’t last long and that navigation in the Strait will eventually recover.
“I think there’s a lot of optimism in the market,” McNally said. “We saw it today with the collapse in oil prices due to what we call the president’s verbal intervention.”
Mr McNally said the market was still struggling to cope with the scale of the disruption. For decades, traders believed that no country should be allowed to close the strait. The fact that it happened in the first place is “utterly tragic and unexpected,” the analyst said.
Mr. Trump’s comments sent the market higher, but Andy Lipow, president of Lipow Oil Associates, said it was too early to draw any concrete conclusions.
“We have to wait and see how Iran reacts to the president’s comments and whether it attacks oil infrastructure in the coming hours,” he said.
—CNBC’s Emma Graham, Eamon Javers and Joseph Wilkins contributed to this report.
