Global oil markets experienced an extraordinary turnaround on Monday, with prices sharply reversing earlier gains and ending the session in negative territory. The dramatic shift erased nearly 30 percent of the previous rally, marking one of the most volatile single-day movements in oil market history.
By around 1:10 AM Pakistani Time (PKT), Brent Crude had fallen by 2.41 percent, dropping $2.23 to about $90 per barrel. Meanwhile, West Texas Intermediate (WTI) declined even more significantly, losing $4.18, or roughly 4.6 percent, to settle near $86.72 per barrel.
Earlier in the day, crude prices had surged sharply as investors reacted to escalating tensions between Iran and the United States. Traders feared that a possible conflict could disrupt global oil supplies, particularly through the strategically important Strait of Hormuz, a key maritime route through which a large portion of Middle Eastern oil exports passes.
However, market sentiment quickly shifted after remarks from Donald Trump, who suggested that the situation with Iran was largely under control. His comments helped calm fears of an immediate escalation or disruption to oil shipments, triggering a rapid sell-off in crude futures.
Within hours, the earlier rally was completely wiped out as traders reassessed geopolitical risks. Analysts noted that the initial price spike appeared to be driven mainly by geopolitical speculation rather than actual supply shortages. Oil exports from Iran continued during the day, with a significant portion of shipments still being directed to China.
Throughout the highly volatile session, crude prices fluctuated by nearly $32, swinging from an intraday high of about $120 per barrel to a low of just under $89. This represented the most dramatic daily price movement since the 2020 Oil Market Crash, when oil markets collapsed amid the global economic shock caused by COVID-19.
The sudden decline could produce mixed effects across the energy sector. Oil producers may face pressure on revenues after increasing spending during the earlier price surge, while industries such as refining and aviation could benefit from the drop in crude costs. Despite the pullback, analysts warn that markets remain highly sensitive to geopolitical developments, and further volatility is possible if regional tensions rise again.
