Global oil markets tumbled more than 4% as traders reacted to shifting signals from former U.S. President Donald Trump, who appeared to back away from earlier threats of military action against Iran. The retreat in hawkish rhetoric eased concerns over a potential supply disruption in the Middle East.
- Oil prices fell more than 4% on January 15, 2026
- Brent crude dropped to $82.30 per barrel; WTI to $79.65
- Trump reversed earlier stance on military action against Iran
- Market-implied strike probability dropped from 12% to under 5%
- Global crude exports from Strait of Hormuz could be affected by future conflict
Crude oil futures plunged over 4% in early trading on January 15, 2026, with Brent crude falling to $82.30 per barrel and U.S. West Texas Intermediate (WTI) dropping to $79.65. The decline followed a series of statements from Trump, who had previously vowed to launch military strikes against Iran in response to its suppression of nationwide protests. New remarks, however, suggested a more measured approach, with Trump stating that 'diplomacy is still on the table' and that 'military options remain available but not imminent.' The reversal in tone sent ripples across energy markets. Traders had priced in a 12% probability of a U.S.-led strike on Iran just days prior, which would have risked disrupting approximately 3.5 million barrels per day of oil exports from the Strait of Hormuz. With that risk now receding, market participants adjusted their positions, liquidating long hedges and shifting capital to other asset classes. The S&P GSCI Crude Oil Index dropped 4.2% in the session, marking its steepest one-day fall since August 2024. The impact extended beyond oil, affecting regional equities and currency flows. Iranian rial volatility spiked, while Saudi Aramco and UAE-based ADNOC reported a modest 0.8% dip in forward crude contracts, signaling reduced risk premiums. Meanwhile, U.S. Treasury yields dipped slightly as investors reevaluated geopolitical risk in their broader portfolios.