Trump says Iran war near end as oil drops below $90

President Donald Trump said Monday the war with Iran could end “fairly soon,” citing Tehran’s softened tone and the destruction of its navy.

Trump spoke to reporters at the White House after meeting with Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, CNBC reported. “We’re seeing momentum toward the end of this conflict,” Trump said. “Iran militarily is effectively over.”

The nine-month conflict has driven a surge in fuel prices that hit nearly every sector of the global economy, and it became a flashpoint in the midterm elections where Republicans lost both chambers of Congress. The administration has toned down its war rhetoric since the results, and Trump’s remarks Monday are the clearest signal yet that Washington is searching for an exit.

The Qatari channel

A diplomat briefed on the meeting told Axios that Trump told Al Thani he wanted a deal and would give talks a chance, but could reverse course if Iran does not take the negotiations seriously. Iran has put forward a two-day proposal to the U.S. via Qatari mediators, Reuters reported, demanding the lifting of sanctions and a new shipping route in the Strait of Hormuz.

Washington was reviewing the proposal, according to the report. Iranian officials have disputed that talks were underway. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said Washington should stop “manufacturing fake news about imaginary talks.”

The Strait of Hormuz is the chokepoint that matters. Roughly a fifth of the world’s oil flows through the narrow waterway between Iran and Oman, and any disruption sends prices higher. Iran’s demand for a new shipping route there is both a negotiating position and a reminder of how exposed the global energy market is to this conflict. The strait has been the focal point of the naval blockade that the U.S. and its Gulf allies have maintained since the war began, and any agreement on access would be the most concrete sign that the conflict is winding down.

Oil and the midterm signal

Oil prices edged lower on Tuesday on the prospect of de-escalation, extending losses from the previous day. U.S. West Texas Intermediate dropped over 1% to $85.8 per barrel, after sliding more than 4% in the prior session. Brent futures dropped more than 1% to $91.56 a barrel, hovering near 10-week lows, CNBC reported.

The oil move is the market’s read on the political shift. Before the midterms, the U.S. had reportedly planned for a potential increase in naval forces in the Middle East, and Trump had hinted at escalating the conflict. The results changed the calculus. Voters expressed frustration with soaring living costs stemming from the war, and the administration now has an incentive to find an off-ramp.

Trump said Qatar, Saudi Arabia, the UAE, Bahrain, and Kuwait would “prefer the status quo,” which involves maintaining the naval blockade against Iran and “Operation Iron Gate,” a task force announced Saturday aimed at preventing Iran from transporting advanced weapons by ground. He reiterated that Iran would not be allowed to have a nuclear weapon and kept the door open for resuming strikes. “America is ‘docked and loaded’ and ready to go,” he said, though he caveated that new strikes were “quite unlikely.”

The economic fallout

The conflict’s ninth month has been the most expensive for consumers. Gasoline prices have climbed steadily since the naval blockade began, and the inflation data released Tuesday showed the pass-through to consumer prices is still working through the system. The consumer price index exceeded estimates, sending Treasury yields higher and pushing the market to fully price in a quarter-point Federal Reserve rate hike at the December meeting.

The link between the war and domestic inflation is direct. Oil at $91 per barrel is a tax on every transaction in the economy, from the diesel that moves freight to the petrochemicals that go into packaging. If the Qatari mediation produces a deal and oil falls back toward $70 or lower, the inflation picture changes quickly. Dallas Fed President Lorie Logan and Fed Governor Christopher Waller have both signaled openness to more aggressive rate hikes, but their case weakens if energy prices retreat.

The midterm verdict was a referendum on those costs. Republicans lost the House and the Senate, and exit polls showed the economy and inflation were the top concerns for voters. Trump’s pivot toward de-escalation is a recognition that the political coalition that elected him in 2024 is not willing to pay the price for an open-ended conflict, and that the 2028 cycle begins now.

What I think

The midterm results are doing what electoral defeats do in democracies: they force a course correction. Trump is not pivoting to peace because he has had a change of heart. He is pivoting because the voters who handed him the White House in 2024 told him in 2026 that the war is costing them too much at the pump and the grocery store. That is how the system is supposed to work, and it is working.

The Qatari channel is the most promising path out of this conflict. Qatar has mediated between the U.S. and Iran before, and it has the trust of both sides to carry messages back and forth. The two-day proposal from Iran is a starting position, not a final offer, and the demand for a new shipping route in the Strait of Hormuz is the kind of specific, negotiable ask that suggests Tehran is serious about talking. The sanctions lifting demand is aspirational, but opening the strait is something both sides can agree on because it serves the global economy and Iran’s own export revenue.

The oil market is already pricing in de-escalation. Brent at $91 is a 10-week low, and if a deal comes together, oil could fall sharply. That would ease inflation, reduce pressure on the Federal Reserve, and give the stock market a catalyst that it badly needs after a hot CPI report. The economic stakes of a peace deal are enormous, and the market will move fast if the mediation produces a framework.

The risk is that Iran is playing for time. Rezaei’s denial that talks are underway could be posturing for a domestic audience, or it could be a genuine split within the Iranian government about whether to negotiate. Trump’s threat of renewed strikes is the pressure that makes a deal possible, and if he removes that pressure too early, Iran has less reason to make concessions. The next two weeks will show whether the Qatari channel produces a real agreement or another round of posturing. The Gulf states’ preference for the status quo is a warning that they fear a bad deal more than a prolonged standoff, and their voice matters in any settlement.