(Bloomberg) – Oil prices fell sharply, posting one of the largest intraday swings on record, after President Donald Trump said discussions to end the Iran conflict were underway, though Tehran denied any talks.
Brent crude dropped as much as 14% to near $96/bbl following Trump’s comments, before partially recovering and then declining again as the prospect of a near-term deal resurfaced. European natural gas prices also fell sharply before trimming losses.
The move comes amid extreme volatility in energy markets since the conflict began, with the Strait of Hormuz effectively closed and disrupting roughly 20% of global oil and LNG flows. The International Energy Agency has described the situation as one of the most significant supply disruptions in history.
Despite the sharp price drop, underlying supply risks remain. Tanker traffic through Hormuz is still severely constrained, with shipowners reluctant to resume transit amid ongoing security concerns.
Trump said U.S. officials had held “productive conversations” on a potential resolution, suggesting a deal could be reached within days. Iranian officials denied that any negotiations were taking place.
Recent U.S. actions—including releases from strategic reserves and temporary sanctions waivers—have aimed to ease market pressure, but traders remain focused on physical supply constraints.
Analysts said the market reaction reflects sensitivity to any signal of de-escalation, even as actual supply disruptions persist. A reopening of Hormuz would be required to restore flows, and the timing of any recovery remains uncertain.
Until then, oil markets are expected to remain volatile, with prices reacting sharply to geopolitical developments rather than underlying fundamentals.
