Crude Prices Drop After Trump Signals Calmer Stance on Iran Protests

Global crude oil futures fell sharply on Tuesday as President Donald Trump’s latest remarks downplaying the severity of ongoing protests in Iran reduced fears of supply disruptions. The move reversed earlier gains fueled by geopolitical tensions.

Oil prices declined nearly 3.2% in early trading as President Donald Trump stated during a press briefing that the unrest in Iran was 'largely contained' and unlikely to impact energy markets. His comments followed weeks of rising speculation that the protests could disrupt crude exports from the Persian Gulf, a key global supply artery. Benchmark Brent crude futures dropped to $87.40 per barrel, while U.S. West Texas Intermediate (WTI) fell to $84.15, marking their largest single-day decline since October 2025. The shift reflects a rapid recalibration of risk premiums that had added $6–$8 per barrel to prices in recent weeks. Market analysts noted that the drop underscores the sensitivity of oil markets to political rhetoric, particularly from leaders with direct influence on energy policy. With U.S. oil production hitting a record 13.8 million barrels per day in December 2025, the administration’s push for energy independence has made global supply shocks a key concern. However, Trump’s reassurance has now shifted investor focus to growing domestic oversupply in the Permian Basin, where output has outpaced pipeline capacity by 17% since mid-2025. Traders are now reassessing the outlook for OPEC+ production adjustments, with some expecting a potential output freeze in the first quarter of 2026 to counteract the selloff. The move has also affected energy stocks, with ExxonMobil (XOM) and Chevron (CVX) both losing 2.4% and 2.1% respectively in pre-market trading.