- Oil prices fall after reports of a possible US pullback in Iran conflict.
- Brent and WTI retreat despite record March gains.
- Fresh attacks near key shipping routes keep supply risks alive.
Oil price movements turned volatile on March 31, with crude slipping after reports suggested the US may be open to easing its military stance in the Iran conflict. The shift, even if tentative, has started to cool what had been an aggressive rally driven by fears of supply disruption.
Brent crude, the global benchmark, fell $1.22 (£0.97) to $111.56 (£89.00) a barrel, reversing earlier gains of around 2 per cent during the session. The more actively traded June contract hovered lower at $105.76 (£84.20). US West Texas Intermediate (WTI) crude also dropped, down 98 cents (£0.78) to $101.90 (£81.20) a barrel, after earlier touching its highest level since March 9. The pullback comes even as oil price volatility, Strait of Hormuz disruption and global supply concerns continue to dominate market sentiment.
A pause, not peace
The shift in prices appears to follow remarks linked to Donald Trump, who has reportedly told aides he is open to ending US operations against Iran without immediately reopening the Strait of Hormuz. The idea, as reported by The Wall Street Journal, suggests a possible attempt to de-escalate without forcing a quick resolution on the critical shipping route.
That stands in contrast to his earlier warning on March 30, where he said the US would “obliterate” Iran’s energy infrastructure if the strait remained closed. The mixed messaging has left traders second-guessing the next move.
Market watchers are also weighing how serious this potential shift is. Matt Gertken, chief geopolitical strategist at BCA Research, as quoted in a news report, said that the US appetite for a prolonged, large-scale conflict appears limited, describing recent threats as part of an effort to push negotiations forward rather than escalate fully.
Supply risks refuse to fade
Even with signs of a softer stance, the risks around supply have not gone anywhere. Iran’s effective closure of the Strait of Hormuz — which typically carries about one-fifth of global oil supply — continues to cast a long shadow over markets.
The situation on the ground remains tense. Kuwait Petroleum Corporation said its fully loaded tanker Al Salmi, carrying up to 2 million barrels, was struck in an alleged attack near Dubai port. Authorities later confirmed the fire had been contained, but concerns over potential oil spills linger.
There are also fresh worries around the Bab el-Mandeb Strait after Yemen’s Iran-backed Houthi forces launched missile strikes towards Israel. The route is a key link between the Red Sea and the Gulf of Aden, making it vital for trade moving through the Suez Canal.
Analysts say these overlapping flashpoints are keeping a floor under prices, even as short-term sentiment shifts. Ben Emons of Fed Watch Advisors reportedly said that the situation reflects a more “asymmetric” dynamic, with the US leaning towards an exit while Iran remains positioned to impose costs on global energy flows.
Despite the dip, the broader trend remains striking. Brent crude has surged around 59 per cent over March, marking its strongest monthly gain on record, while WTI is up 58 per cent, its biggest rise since May 2020.
For now, oil markets seem caught between two forces — signs of possible de-escalation on one side, and persistent threats to supply on the other. Which one takes the lead could decide whether prices cool further or resume their upward climb.
