West Texas Intermediate (WTI) Crude Oil experienced a dramatic decline on Monday, dropping roughly 9% and falling back below $100 per barrel, with prices testing $90.00 after tracing one of the widest intraday ranges in modern oil market history. The session saw prices spike above $101.00 following the expiration of President Donald Trump's 48-hour ultimatum to Iran, before reversing sharply to a session low around $84.00 and stabilizing near $90.00. The high-to-low range of approximately $17 dwarfed recent sessions, reflecting heightened volatility as markets reacted to geopolitical developments [1].
President Trump announced on Truth Social that the US and Iran had held "very good and productive conversations" about a "complete and total resolution" of hostilities, instructing the Pentagon to postpone all military strikes on Iranian power plants for five days. This move reversed his earlier ultimatum, which threatened to "obliterate" Iran's power grid if the Strait of Hormuz was not reopened. However, Tehran denied any talks were underway, and Iran's Islamic Revolutionary Guard Corps reiterated its intent to target regional energy infrastructure if attacked, creating uncertainty and keeping markets on edge [1].
On the supply side, the International Energy Agency's (IEA) record 400-million-barrel coordinated reserve release, announced on March 11, is beginning to flow, with the US contributing 172 million barrels from the Strategic Petroleum Reserve over an estimated 120-day delivery window. Goldman Sachs raised its WTI forecast to $98 for March and $105 for April, noting that Strait of Hormuz flows remain at roughly 5% of normal volume [1]. Federal Reserve Governor Stephen Miran commented that it is too early to assess the inflation impact of the energy price shock but still believes rate cuts are warranted to support the labor market [1].
U.S. Energy Secretary Chris Wright stated that energy prices could fall "pretty significantly" if a deal is reached with Iran to reopen the Strait of Hormuz and stabilize prices after weeks of disruption. Wright emphasized that energy markets are closely tied to developments in the region and could shift quickly if an agreement is made. He suggested that a peace agreement could lead to a deal, but short-term market volatility is expected as the situation continues to develop [2].
CONCLUSION
WTI crude oil markets remain highly volatile amid postponed US military action and ongoing uncertainty regarding negotiations with Iran. While current disruptions have pushed prices lower, officials and analysts suggest that a deal to reopen the Strait of Hormuz could significantly reduce energy prices, though short-term volatility is expected as geopolitical tensions persist.