Crude oil cratered more than 6% after President Donald Trump signaled that negotiations with Iran were entering their final stages. Iran is reportedly reviewing the latest peace proposal, though Trump made clear that military action remains on the table if diplomacy stalls.
The move wiped out weeks of geopolitical risk premium in a single session. The US dollar, which had been trading near a six-week high, softened as investors recalibrated their expectations from conflict to potential resolution.
What happened and why it matters
The sell-off was driven almost entirely by the prospect of de-escalation. Middle East supply disruption fears have been the dominant force behind oil’s recent pricing, and even the suggestion that those fears might be overblown was enough to trigger a rout.
Brent crude had been hovering around $110 per barrel, with WTI near $103, when Trump floated the idea that the conflict with Iran could end “very quickly.” Those levels reflected a substantial war premium baked into every barrel.
