Brent crude fell about 8.5 percent to $92.50 (£68.85) a barrel, while US‑traded oil slipped nearly 9 percent to $88.60. Despite the decline, prices remain roughly 30 percent higher than before the war began.
The fall came after US President Donald Trump said on Monday that the war would end “pretty quickly.”
At a press conference in Florida, Trump reiterated that the US is “achieving major strides toward completing our military objectives,” adding that the campaign was “an excursion into something that had to be done” and is close to being finished.
Oil prices, which had spiked overnight by as much as 32 percent to $119 a barrel, later plunged. By 4pm ET, US crude was down about 5 percent at $86 a barrel, while Brent crude slipped more than 3.5 percent to below $89.
Asian stock markets responded positively to the dip in oil prices. Japan’s Nikkei 225 rose 2.8 percent, and South Korea’s Kospi gained more than 5 percent, BBC reports.
Regional indexes had previously been hit hard by surging oil costs, as many Asian economies are major importers of Gulf energy.
US stock markets also staged a sharp rebound. The S&P 500, after falling 1.5 percent earlier, closed up 0.83 percent. The Nasdaq Composite swung from a 1.4 percent drop to finish 1.38 percent higher. The Dow Jones recovered from an 880‑point slide to end the day up 239 points.
Despite the pullback, US crude remains more than 50 percent higher since the start of the year and up over 30 percent in just the past five days. Gasoline prices continue to climb as well, with the national average reaching $3.49 a gallon on Monday, an increase of more than 50 cents since the war began, according to GasBuddy.
NBC News reported that Japan’s Nikkei 225 suffered its steepest decline since last April’s tariff‑driven sell‑off, plunging 5.2 percent and sliding into correction territory defined as a drop of 10 percent or more from a recent peak.
South Korea’s Kospi index also sank 6 percent, with trading briefly halted for 20 minutes amid heavy selling. In Europe, the Stoxx 600 closed down 0.6 percent, while markets in Germany, France, Italy, and Spain each lost around 1 percent.
Bond markets, which had earlier weakened, rebounded by the end of the session. Yields on US Treasuries fell, with the 10‑year note dipping to 4.10 percent and the 30‑year to 4.71 percent.
Energy prices also retreated. Natural gas futures in New York dropped 4 percent by late afternoon, while European contracts pared earlier gains to finish up about 5 percent. Heating oil often used as a stand‑in for jet fuel slid more than 8 percent after having surged 23 percent earlier in the day, the NBC News report said.
Finance ministers from major industrialised nations held a video call Monday to weigh a coordinated release of oil reserves to ease soaring prices. For now, they opted against such a move.
