Oil also swung sharply lower after Trump told CBS News the conflict was already ‘very far ahead of schedule’ and ‘very complete, pretty much.’
US crude had surged overnight above $119 a barrel – its highest level since the global energy shock triggered by Russia’s invasion of Ukraine in 2022.
But prices tumbled later in the day.
The US benchmark crude fell roughly 9 percent to around $81 a barrel, while global benchmark Brent crude dropped below $90 after the president’s remarks.
Markets were also helped by signs governments may step in to calm energy prices.https://public.flourish.studio/visualisation/27961617/embed
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The price for gasoline and diesel fuel are shown at a gas station in Indianapolis today (Monday)
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France’s finance minister said the Group of Seven major economies is prepared to release oil from strategic reserves if necessary to stabilize global markets after shipping disruptions in the Strait of Hormuz triggered a surge in prices.
The comments followed an emergency meeting of G7 finance ministers as Middle East producers cut output because tankers were unwilling to pass through the critical waterway.
The oil price surge on Sunday followed the largest weekly gain ever recorded for US crude, with prices jumping more than $40 a barrel in little more than a week.
There were fears the the record price for US oil – $145 a barrel reached in 2008 – was coming back into view.
In fact, Qatar’s energy minister Saad al-Kaabi warned prices could reach $150 a barrel if tankers remain unable to pass through the Strait of Hormuz.
But some investors believe the disruption may prove temporary.
BlackRock strategists said Monday that while the surge in oil prices will likely create volatility in financial markets, it may not derail the broader economic expansion if supply disruptions last weeks rather than months.
Still, spike is already hitting Americans in their wallets. https://public.flourish.studio/visualisation/27963597/embed
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Gas prices across the United States surged to a national average of $3.47 per gallon, with California feeling the strain as prices climbed. At a Chevron station in downtown Los Angeles, prices were among the highest seen this week
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The national average price of gasoline climbed to $3.47 a gallon today, according to AAA – up about 16 percent in just a week since the conflict began.
High-cost states such as Washington, Hawaii, and Oregon are seeing gas prices exceed $4 per gallon.
California, which has the highest average in the country is averaging $5.20 per gallon, according to AAA. At a Chevron station in Los Angeles, drivers were facing prices as high as $8.21 for a gallon of regular gas.
Cities such as Baltimore, Maryland, have seen their gas prices jump 55.5 cents in just a week at $3.49 a gallon, according to GasBuddy.
New York is hovering just below the national average, with prices at $3.40 per gallon – up 40 cents from $3.01 just a week ago. White Plains currently has some of the highest prices in the state at $3.48 per gallon.
Oil’s surge comes as the war has effectively closed the Strait of Hormuz, the narrow shipping route controlled by Iran through which roughly one-fifth of the world’s oil normally flows each day.
Kuwait – the fifth-largest producer in the Organization of the Petroleum Exporting Countries (OPEC) – announced precautionary cuts to its output because of what it called threats to ships passing through the Strait.
In Iraq, production from the country’s three main southern oilfields has reportedly collapsed by around 70 percent, dropping to about 1.3 million barrels a day from more than 4 million barrels before the war.