Oil prices dropped sharply on Tuesday while global stock markets surged after Donald Trump indicated that the ongoing US-Israel conflict with Iran might conclude earlier than previously anticipated.

As tensions in the crude-rich Middle East entered a second week, Trump told CBS News in a phone interview that the campaign was progressing far ahead of his initial timeline of about a month.

“I think the war is very complete, pretty much. They have no navy, no communications, they’ve got no air force,” Trump said, adding that Iran had little military capacity left.

He later told reporters in Florida that the war would be “ended soon,” warning, however, that if hostilities resumed, Iran would face even harsher strikes. Trump also threatened “incalculable” consequences if Tehran blocked oil shipments through the strategic Strait of Hormuz, a key route that carries roughly a fifth of global oil supplies.

Crude Prices Tumble

Investors reacted swiftly to the president’s comments. Crude prices plunged nearly 10 percent before trimming losses to about five percent. European gas prices also dropped 15 percent after soaring by as much as 30 percent a day earlier.

The decline followed extreme volatility on Monday, when oil prices spiked nearly 30 percent to above $119 per barrel before sliding to as low as $84.

By 0810 GMT:

West Texas Intermediate (WTI) fell 8.8 percent to $86.43 per barrel.

Brent North Sea Crude dropped 8.6 percent to $90.44 per barrel.

Global Markets Rally

Asian markets posted strong gains, with Seoul’s Kospi index rising more than five percent and Tokyo’s Nikkei 225 climbing 2.9 percent. Markets in Hong Kong, Shanghai, Sydney, Singapore, Bangkok, Mumbai, Taipei, Manila and Jakarta also recorded advances.

European stocks in London, Paris and Frankfurt opened higher, extending gains seen on Wall Street, where the Dow Jones Industrial Average ended 0.5 percent higher at 47,740.80.

The rally was further supported by reports that finance ministers from the Group of Seven (G7) were considering tapping emergency oil stockpiles to stabilise supply. Trump also signalled a temporary waiver of certain oil-related sanctions following discussions with Russian President Vladimir Putin.

Strait of Hormuz Tensions

Diplomatic efforts have intensified around reopening the Strait of Hormuz, which Iran reportedly blocked in retaliation for US-Israeli strikes. French President Emmanuel Macron said France was working with allies on a “purely defensive” mission to secure the waterway.

Shipping disruptions have already mounted, with several vessels reportedly attacked near the strait. Global shipping giant MSC suspended some Gulf export shipments, while energy firms in Bahrain, Qatar and Kuwait declared force majeure, warning of possible missed export targets.

Saudi Arabia also reported thwarting a drone attack targeting an eastern oil field near the Emirati border.

Market analysts cautioned that despite the rebound, volatility remains elevated. Chris Weston of Pepperstone described the past 24 hours as an “incredibly wild ride” for investors, noting that geopolitical uncertainty continues to weigh heavily on energy markets.

While Trump’s remarks have eased immediate fears of prolonged conflict, traders remain wary as developments in the region continue to unfold.