Oil prices experienced a sharp decline in early Asian trading following claims by US President Donald Trump that negotiations to end the ongoing conflict were underway. These assertions have been disputed by Iranian officials.
Brent crude futures fell by 6.6% to $97.56 per barrel, while West Texas Intermediate (WTI) crude, the US benchmark, decreased by more than 5.5% to $87.20.
President Trump stated on Tuesday that discussions aimed at resolving the conflict were happening “now,” adding that the parties the US was engaging with were eager to reach an agreement.
However, officials in Tehran dismissed claims of US-Iran talks as “fake news” on Monday, amidst continued exchanges between Israeli and Iranian forces.
Trump indicated that Vice President JD Vance and Secretary of State Marco Rubio were involved in the efforts to bring an end to the conflict.
The President further asserted that US-Israeli strikes on Tehran had led to “regime change,” reiterating his claim that Iranian leaders had committed to never pursuing nuclear weapons.
Tehran has previously refuted claims of contact with the US, denouncing them as attempts to manipulate market conditions.
Brent crude had risen above $100 a barrel on Tuesday, and despite the recent dip, remains significantly higher than pre-February 28 levels, before the US and Israel initiated attacks on Iran.
The conflict has precipitated a global energy crisis, with governments worldwide implementing measures to mitigate the economic impact in recent weeks.
Oil and gas prices have surged since the onset of the conflict, as Iran has effectively blockaded the Strait of Hormuz, a crucial waterway responsible for approximately 20% of global oil and liquefied natural gas transit.
The conflict has also triggered significant volatility in global financial markets.
Executives from leading global companies have recently cautioned about the potential ramifications of the ongoing war.
On Tuesday, the CEO of energy giant Shell warned that Europe could face oil shortages as early as next month.
Wael Sawan, Shell’s chief executive, stated at an energy industry conference in Houston: “South Asia was the first to bear the brunt. That’s moved to South East Asia, North East Asia, and increasingly into Europe as we move into April.”
Larry Fink, the head of US financial firm BlackRock, told the BBC that a global recession could be triggered if oil prices reach $150 per barrel.
He added that crude prices could remain above $100—or potentially closer to $150—for years if the conflict remains unresolved and Iran is not reintegrated into the international community.
Such a scenario would have “profound implications” for the economy and likely lead to a “stark and steep recession.”
President Ferdinand Marcos Jr. warns the war poses an “imminent danger” to the country’s energy supplies.
While some Iranians dismiss the possibility of peace talks, others express concern that a deal may preserve the current leadership.
The gas provider states that price increases are temporary but further rises remain possible.
President Trump claims the US is already in contact with a “top person” in Iran, but Tehran denies the commencement of any negotiations.
US President Donald Trump has suggested diplomatic talks to end the conflict, but Israel may not yet be prepared to withdraw.