Oil Prices Fall After Reaching 3-Year High

March 10: Oil prices declined on Tuesday, reversing Monday's gains that saw them reach their highest level in over three years. The U.S. President Donald Trump's prediction that the war in the Middle East could be over soon eased concerns about prolonged disruptions to global oil supplies.

Market Movement

• Brent futures fell by $6.51, or 6.6%, to $92.45 per barrel at 0018 GMT.
• U.S. West Texas Intermediate crude decreased by $6.12, or 6.5%, to $88.65 per barrel.

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Price Surge and Retreat

Oil prices surged past $100 per barrel on Monday, reaching session highs of $119.50 for Brent and $119.48 for WTI, their highest since mid-2022. The prices retreated after Russian President Vladimir Putin held a call with Trump and shared proposals aimed at a quick settlement to the Iran war.

Market Analysis

Tony Sycamore, IG market analyst, expects crude oil to remain highly volatile, trading within a wide range of $75 to $105 in the sessions ahead. The analyst's prediction is influenced by the ongoing U.S.-Israeli war with Iran, which has disrupted shipping in the region and led to supply cuts by Saudi Arabia and other producers.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Gulf Oil Producers and G7 Response

Gulf oil producers have begun cutting output in response to the disrupted shipping in the region. Iraq slashed production at its main southern oilfields by 70% to 1.3 million barrels per day, while Kuwait Petroleum Corporation declared force majeure. Saudi Arabia has also begun trimming production. The G7 nations said they were prepared to implement "necessary measures" in response to surging global oil prices but stopped short of committing to release emergency reserves.