Oil falls below $90 as Trump says Iran war ending fairly soon

Brent crude fell below $90 a barrel for the first time since August on Tuesday after President Donald Trump said the war with Iran could end “fairly soon,” CNBC reported.

Brent, the benchmark for about 80% of global crude, hit a low of $89.03 before settling at $90.68, down 2.1%. U.S. West Texas Intermediate fell 1.6% to $85.45. Both benchmarks reached their lowest levels since Aug. 31.

Trump told reporters at the White House that Iran was “talking very politely” with Washington. “We’re seeing momentum toward the end of this conflict. I think it’s going to be ending fairly soon,” he said. “Iran militarily is effectively over.”

The comments followed a meeting with Qatar’s prime minister, Sheikh Mohammed bin Abdulrahman Al Thani. Trump said in a Truth Social post that Qatar, Saudi Arabia, the UAE, Bahrain and Kuwait would “prefer the status quo,” meaning a continued naval blockade that prevents Iran from transporting advanced weapons by ground.

Oil prices have been volatile all year, tracking every shift in the nine-month conflict. Brent started 2026 around $60 a barrel, soared to $130 as military strikes escalated in March and April, retreated in June and July, then climbed back to those levels as the war appeared entrenched. The drop below $90 unwinds months of geopolitical risk premium.

Crude flows through the Strait of Hormuz have largely recovered, CNBC reported separately. But consumers have suffered from the volatility. Diesel, gasoline and jet fuel prices soared as the war, Houthi attacks on Saudi Arabia, and the Russia-Ukraine conflict exacerbated a shortage of refining capacity.

Trump and Vice President JD Vance have both acknowledged that public disapproval of the Iran war and high energy prices contributed to Republicans’ punishing midterm losses last week. The war was a dominant theme in exit polls and in the post-election blame game among Republican contenders for 2028.

The U.S. has largely held back on military strikes since September. Trump said in early October that strikes would not resume until after the midterms. The U.S. carried out what Trump called “minor strikes” on Iran after reports that two missiles struck Qeshm Island, near the Strait of Hormuz.

ING strategists Ewa Manthey and Warren Patterson said the market is unwinding the geopolitical risk premium as expectations grow that the conflict could move toward de-escalation. “Signs that regional oil flows are recovering have added to the downward pressure,” they wrote in a note. “Reports that Iran may be softening its position on control of the Strait of Hormuz have also reduced concerns over a prolonged disruption.”

Not everyone agrees. Fereidun Fesharaki, chairman of energy consultancy FGE, told CNBC’s “Squawk Box Asia” that he sees no prospect of a peace deal. “The difference between the two sides is so wide, it cannot be bridged,” he said. “The U.S. wants all the nuclear material, enriched material, to be transferred out of Iran, and there is no way that the Iranian regime would agree to this.”

Fesharaki said Trump has a two-week window to either declare victory and walk away, or escalate. “If he goes to war, he’s got only a window of two weeks from today for himself and for Netanyahu, or there will be no war at all on a long-term basis,” he said.

The political landscape is shifting in Israel too. Prime Minister Benjamin Netanyahu’s party failed to win a majority in Israel’s election last month. Rival Gadi Eisenkot, the former chief of the Israel Defense Forces, was officially tasked with forming a government on Sunday, ABC News reported.

If oil stays below $90, the effects would ripple through the economy. Gasoline prices, which have been a drag on consumer sentiment all year, would fall. The Federal Reserve, which is fighting inflation that the war helped cause, would face less pressure. And Trump, who lost both chambers of Congress in part because of energy prices, would have a story to tell about ending the conflict he started. The last time Brent was below $90, in August, gasoline averaged $3.42 a gallon nationally. Every $10 drop in crude translates to roughly 25 cents off the price at the pump, according to energy analysts at Rystad Energy. For a household that drives 12,000 miles a year at 25 miles per gallon, that is $120 a month in savings. Multiplied across 130 million households, it is real money, and it shows up in consumer spending data within weeks.

What I think

The market is buying what Trump is selling, and it should not. Trump has said the war is “effectively over” before. The pattern is familiar: declare victory, strike again a week later, repeat. The Strait of Hormuz flows have recovered, but the blockade remains, and the blockade is the point. Trump cannot end the blockade without letting Iran sell oil, and he cannot let Iran sell oil without abandoning the maximum pressure campaign that started the war.

Fesharaki is right. The gap between what the U.S. demands and what Iran will accept is not bridgeable. The U.S. wants Iran’s enriched uranium removed from the country. Iran will not give up its nuclear program. No amount of negotiation changes that. Trump can declare victory and walk away, which is what the market is pricing in, or he can keep fighting, which is what the last nine months suggest he will do.

The oil price drop is real, and it will help consumers and the Fed in the short term. But it is a bet on a peace deal that does not exist. When the next strike happens, the premium comes back, and $90 looks like a floor, not a ceiling.