Global oil prices staged a dramatic reversal to end Monday, erasing earlier gains of around 30 percent and turning negative during the session in one of the sharpest single-day swings ever recorded.
As of 1:10 AM Pakistani Time (PKT), Brent is down 2.41 percent or by $2.23 at $90 per barrel while West Texas Intermediate (WTI) has lost $4.18 or 4.6 percent to $86.72 per barrel.
Crude markets had surged earlier on fears that escalating tensions between Iran and the United States could disrupt global supply, particularly through the strategically vital Strait of Hormuz, a key route for Middle Eastern oil exports.
However, prices quickly reversed after Donald Trump suggested the situation with Iran was “very complete”. This eased immediate concerns about a broader conflict or supply disruption.
The comments triggered a sharp sell-off in crude futures, wiping out the earlier rally within hours.
The earlier surge appeared to be driven largely by geopolitical risk premiums rather than actual supply losses, as exports from Iran continued to flow, with much of the crude heading to China.
During the volatile trading session, crude futures swung by about $32 between the intraday high of around $120 per barrel and low of just under $89, marking the most dramatic daily movement since 2020 Oil Market Crash, when US benchmark oil prices briefly fell into negative territory over COVID-19 driven fears.
Today’s sudden reversal is expected to have mixed implications for the energy sector. Upstream oil producers could face pressure on margins after ramping up hedging and spending during the price spike, while refiners and airlines may benefit from the sharp decline in crude prices.
Despite the steep drop, markets remain sensitive to geopolitical developments, and further volatility cannot be ruled out if tensions in the region escalate again.
