Trump Says Oil Prices Will Plummet After Iran War Ends ‘Very Soon’
U.S. President Donald Trump said oil prices will fall sharply once the war with Iran ends, arguing that crude supply through the Strait of Hormuz is already recovering and that the conflict could be over “very soon.” His comments come as oil markets remain highly sensitive to developments around the strategic shipping route and negotiations between Washington and Tehran.
The statement is significant for global energy markets because Brent crude has recently traded above $100 a barrel as disruptions around the Middle East restricted oil flows and increased the geopolitical risk premium.
Trump's comments point to the possibility of a substantial reversal if the conflict ends and shipping through Hormuz returns to normal. However, the timing of such an outcome remains uncertain, and Iran and the United States are still divided over the conditions for reopening the Strait.
What Trump Said About Oil Prices
Trump said on Sunday that oil would “come dropping down” once the war ends and predicted that the decline would be substantial. He also said U.S. negotiators could engage in further discussions with Iran during the week.
Trump pointed to what he described as increased oil flows through the Strait of Hormuz and said the United States had taken a record amount of oil out of the Strait the previous night.
His comments came despite Washington rejecting Iran's latest proposal concerning the reopening of Hormuz. Iran has maintained conditions linked to the removal of the U.S. blockade and reduction of military pressure before it fully reopens the route.
That leaves the oil market facing two very different scenarios: a rapid improvement in supply conditions if diplomacy succeeds, or continued price pressure if the standoff persists.
Why the Strait of Hormuz Matters So Much
The Strait of Hormuz is one of the world's most important oil chokepoints.
According to the International Energy Agency, around 20 million barrels per day of crude oil and petroleum products passed through the Strait in 2025, representing roughly a quarter of global seaborne oil trade. Alternative export routes exist, but their capacity is not sufficient to completely replace Hormuz.
That makes any sustained disruption particularly important for oil prices.
The IEA has described the current Middle East disruption as the largest supply disruption in the history of the global oil market, with tanker movements through Hormuz having fallen dramatically from pre-conflict levels.
For oil traders, therefore, the question is not simply whether the war ends. What matters is whether an end to the conflict actually restores reliable commercial shipping and allows producers to bring shut-in production back online.
Oil Could Fall Sharply If Supply Normalizes
Trump's argument has an economic basis: a significant portion of the current oil premium reflects supply disruption and geopolitical uncertainty.
If Iran and the United States reach an agreement, shipping risks decline and more crude can reach international markets. Gulf producers could also restore production that has been curtailed because of restricted export capacity.
The EIA expects Middle Eastern oil production to increase as flows through Hormuz gradually improve and alternative export routes are used. Its September outlook assumes that some export constraints will continue through the end of 2026, while most Middle Eastern production could return closer to pre-conflict levels during the second quarter of 2027.
This provides an important distinction for investors: an immediate diplomatic breakthrough could push oil lower, but returning completely to pre-war supply conditions could take considerably longer.
Why Oil Has Been So Volatile
Oil prices have repeatedly responded to changes in expectations about the conflict.
When investors saw signs of possible diplomacy earlier in September, Brent prices declined sharply. But renewed military tensions and uncertainty over Hormuz quickly pushed prices higher again. Reuters reported that Brent had reached $107.63 earlier in September following a sharp increase in tanker attacks and concerns over supply disruptions.
More recently, optimism over diplomacy again pushed crude lower before the latest U.S.-Iran impasse sent prices higher.
Reuters reported on September 28 that Brent rebounded more than 3% after Trump rejected an Iranian proposal intended to resolve the conflict and reopen the Strait.
This shows how much of the current oil price is being determined by expectations about future supply rather than only today's production figures.
What Lower Oil Prices Would Mean for India
A sustained decline in crude prices could be particularly important for India because the country depends heavily on imported oil.
Lower crude prices can reduce the import bill and ease pressure on the rupee. They can also reduce input costs for fuel-intensive businesses and potentially moderate inflationary pressure.
The impact would not be identical across sectors.
Airlines and logistics: Lower fuel costs can reduce one of the largest operating expenses.
Paints and chemicals: Many companies use petroleum-derived raw materials, so cheaper crude can reduce input costs.
Consumer businesses: Lower transportation and packaging costs can provide some margin relief.
Oil marketing companies: The effect depends on crude procurement costs, retail pricing, refining margins and government policy.
Upstream oil producers: Lower crude prices can reduce realizations compared with a high-price environment.
Therefore, a sharp fall in crude would create winners and losers across the energy and broader stock market rather than benefiting every company equally.
Could Oil Really Return to Pre-War Levels?
That remains uncertain.
The EIA's September outlook already anticipated a gradual recovery in Middle Eastern production and projected Brent to average about $90 a barrel in the second half of 2026 before declining to around $74 in 2027 as production recovers and inventories rebuild.
Those projections are not guarantees, particularly because the geopolitical situation can change quickly.
There is also a second issue: even after a ceasefire, damaged infrastructure, shipping insurance, tanker availability and inventories can affect how quickly supply normalizes.
The IEA has also noted that global inventories have been under pressure and that reduced supply has already affected refined products such as diesel and jet fuel.
So, an end to the war could remove a major risk premium, but the physical oil market would still need time to rebalance.
What Investors Should Watch Next
The next major oil-market signals are likely to come from diplomacy and actual shipping activity rather than political statements alone.
Investors should monitor:
- U.S.-Iran negotiations: A formal agreement would be a major potential catalyst for crude.
- Hormuz shipping volumes: Actual tanker movements will indicate whether reopening is genuinely taking place.
- Middle Eastern production: Restarting shut-in production could increase global supply.
- Oil inventories: Falling inventories can limit how quickly prices decline.
- Brent crude: Sustained movement below key price levels would provide a clearer indication that the geopolitical premium is fading.
- Indian rupee: Lower crude prices could reduce pressure on India's external balances.
The IEA cautions that maritime traffic estimates in the region are subject to uncertainty because some tankers have switched off their automatic identification systems, making precise measurement of actual flows difficult.
Oil Outlook: Diplomacy Is the Biggest Catalyst
Trump's prediction of sharply lower oil prices rests on an important assumption: that the Iran conflict ends soon enough and that the end of hostilities leads to a meaningful restoration of oil flows.
That outcome would remove a significant portion of the geopolitical premium currently embedded in crude prices. But the timing remains uncertain because Washington and Tehran have not yet agreed on the conditions for reopening the Strait of Hormuz.
For investors, the key distinction is between a diplomatic headline and a physical improvement in oil supply. A ceasefire could trigger an immediate market reaction, but sustained lower crude prices would require shipping, production and inventories to normalize.
If Trump's expectation of a near-term end to the war becomes reality, crude could face substantial downward pressure. Until there is clear evidence of restored supply and uninterrupted Hormuz traffic, however, oil markets are likely to remain highly sensitive to every development between the U.S. and Iran.
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This article is for informational and educational purposes only and should not be considered investment advice.