Brent crude fell from nearly $120 a barrel to around $90 on Tuesday—a $30 swing in less than 24 hours—after US President Donald Trump signaled the war with Iran may be nearing its end and announced plans to deploy the US Navy to escort tankers through the Strait of Hormuz.
25% of the world’s seaborne oil trade has been locked behind a geopolitical ultimatum.
The retreat followed Monday’s surge, driven by Iran’s Revolutionary Guard Corps (IRGC) announcing it would grant free passage through the strait to any country that expels US and Israeli diplomats—and by Gulf producers beginning to cut output as onshore storage filled up with barrels that could not reach export markets.
The swing is a ten-day story in a single number: 25% of the world’s seaborne oil trade has been locked behind a geopolitical ultimatum.
The offer no one can accept
Iran’s state broadcaster IRIB announced that the IRGC would grant countries severing diplomatic ties with both the United States and Israel “full right and freedom” to transit the waterway—effective Tuesday.
Brent surged roughly 50% since the US-Israeli strikes began on 28 February—the first time prices exceeded $100 a barrel since Russia’s 2022 invasion of Ukraine.
No European government expelled Washington’s ambassador. No Gulf monarchy broke with the US over the announcement. The offer was not designed to be accepted. It was designed to force every government with ships at anchor to price out the choice publicly—and to be seen doing it.
Al Jazeera reported that Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq have already begun curbing output as storage facilities fill.
Brent surged roughly 50% since the US-Israeli strikes began on 28 February—the first time prices exceeded $100 a barrel since Russia’s 2022 invasion of Ukraine, with major shipping firms suspending transits in the first days of the conflict and hundreds of vessels anchoring on both sides of the strait.
Washington and Paris counter
Trading Economics reported that Trump said he plans to waive sanctions on Iranian oil and have the US Navy escort tankers through the strait in an effort to keep prices in check—a direct counter to the IRGC’s offer. G7 finance ministers said the group “stands ready” to release oil from strategic reserves if necessary, though no action has been taken yet.
“This is essential for international trade, but also for the flow of gas and oil, which must be able to leave this region once again.”
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France is moving on a parallel track. Macron told reporters in Paphos, Cyprus, that France was organizing a “purely defensive, purely support mission” to escort tankers through the strait once the conflict’s most intense phase subsides. “This is essential for international trade, but also for the flow of gas and oil, which must be able to leave this region once again,” Macron said.
An EU Commission spokesperson said European stockpiles remained sufficient for now.
EU foreign policy chief Kaja Kallas said the bloc was considering expanding its existing maritime mission to cover Hormuz.
Deutschlandfunk reported that Germany’s Chancellor Friedrich Merz expressed concern over rising energy prices, while an EU Commission spokesperson said European stockpiles remained sufficient for now.
Kyiv moves to hold the line on prices
Ukraine is already feeling it. Prime Minister Yulia Svyrydenko held an emergency meeting with fuel market representatives on Tuesday, warning against domestic price speculation on top of the external surge.
“Fuel prices should be set fairly, taking into account the current situation, particularly in global markets, but without internal speculation.”
“Fuel prices should be set fairly, taking into account the current situation, particularly in global markets, but without internal speculation,” Svyrydenko wrote on Telegram. She tasked the ministers of energy and economy to monitor the situation and coordinate with market operators.
Why the price won’t settle quickly
Tuesday’s retreat may be temporary. The strait does not reopen the moment a naval escort arrives. Insurance markets—which withdrew coverage before any formal blockade was declared—will require sustained safety guarantees before underwriters return.
Iran is counting on the threat of closed passage to outlast the military campaign against it.
That process takes weeks. Until it completes, the ships stay anchored, the producers keep cutting, and the price remains hostage to every statement out of Washington and Tehran.
The IRGC ultimatum and the US and French escort proposals both come down to one question: who controls passage through the world’s most important energy lane? Iran is counting on the threat of closed passage to outlast the military campaign against it. The $30 move in 24 hours suggests markets have not yet decided who is right.
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