Oil prices tumbled sharply during extended trading on Monday after President Donald Trump declared the US's war with Iran "is very complete".
Earlier today, the President revealed he was contemplating taking control of the Strait of Hormuz, the world's most critical chokepoint for crude shipments.
US crude dropped 6.19 per cent to $85.27 (£63.45) per barrel by 3:37 p.m. ET, whilst the global benchmark Brent fell 4.6 per cent to $88.43 (£65.81).
In a telephone conversation with CBS News, the president confirmed vessels were passing through the waterway and stated he was "thinking about taking it over".
Oil prices are falling as President Trump says the US-Iran war is 'very complete'
|GETTY / TRADING ECONOMICS
Speaking to CBS News, Trump declared the conflict with Iran was approaching its conclusion: "I think the war is very complete, pretty much.
"They have no navy, no communications, they've got no Air Force. Their missiles are down to a scatter.
"Their drones are being blown up all over the place, including their manufacturing of drones. "If you look, they have nothing left. There's nothing left in a military sense."
The disruption to shipping through the Strait has created the most significant oil supply crisis on record, according to analysis from consultancy Rapidan Energy.
The Strait of Hormuz is one of the most important shipping routes in the world, especially for oil exports | GETTYLATEST DEVELOPMENTS
Donald Trump has told US media that the Iran war is 'very complete,' in the biggest indication to date the end could be in sight for the 10-day long war | GETTYApproximately one-fifth of global oil consumption passes through the waterway. Earlier in the session, prices had surged dramatically, with Brent reaching $119.50 and WTI climbing to $119.48 overnight.
This marked the first occasion crude had breached $100 per barrel since Russia's invasion of Ukraine in 2022.
Gulf Arab states had reduced production as vessels avoided the Strait amid Iranian threats, with energy analyst Matt Smith of Kpler noting only a small number of commercial ships were transiting the passage.
G7 energy ministers are scheduled to convene virtually on Tuesday morning to consider a coordinated release of oil from strategic stockpiles, according to sources who spoke to CNBC.
The US-Iran war could cause oil prices to spike across the world's energy markets
| ReutersAny decision to tap reserves would follow that meeting. Finance ministers from the G7 nations had already gathered virtually on Monday to address the Iran conflict, issuing a joint statement pledging readiness "to take necessary measures, including to support global supply of energy such as stockpile release."
Separately, President Trump held discussions with Russian President Vladimir Putin regarding the war, with Kremlin aide Yuri Ushakov confirming President Putin had presented proposals for a swift resolution.
It is understood that the US is considering easing sanctions on Russian oil to ease pressures on the wider gas and energy market.
Analysts have sounded the alarm that an ongoing conflict in the Middle East could benefit Russia's economy as more countries turn to the regime for energy.
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