Oil drops in Asia on Trump de-escalation hopes

March 31, 2026 (MLN): Oil prices fell in early Asian trading on Tuesday, reversing previous gains as markets reacted to signals that Donald Trump may be seeking a quicker resolution to the ongoing Iran conflict.

Currently, Brent crude futures went down by $5.30, or 4.70%, to $107.48 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures decreased by $0.03, or 0.03%, to $102.85 per barrel by [11:28 am] PST.

According to a report by The Wall Street Journal, Trump has indicated to his advisers that the United States could end its military operations against Iran even if the strategically vital Strait of Hormuz remains closed.

The move shows concerns that forcing Tehran to reopen the waterway could prolong hostilities.

Market sentiment was further shaped by comments from Matt Gertken, who suggested that Washington is unlikely to pursue an extensive military campaign, as reported by CNBC.

Speaking on Squawk Box Asia, Gertken described Trump’s recent rhetoric as part of a broader strategy to push Iran toward a negotiated settlement.

He noted that the U.S. is primarily focused on securing concessions around Iran’s highly enriched uranium, adding that a full-scale ground invasion remains highly unlikely.

However, he warned that failure to achieve progress within a short timeframe could lead to renewed escalation, potentially targeting key elements of Iran’s regime.

Earlier statements from Trump had taken a more aggressive tone. He warned that if Iran refuses to reopen the Strait of Hormuz or agree to a ceasefire, the U.S. could expand strikes to include critical civilian infrastructure such as power plants, oil facilities, and even desalination sites.

The conflict, now in its fifth week, continues to intensify across the region. In a fresh escalation, Iran reportedly struck a fully loaded Kuwaiti oil tanker anchored near Dubai’s port.

Authorities in Dubai later confirmed that emergency teams successfully contained the fire.

The incident signals Iran’s increasing willingness to disrupt shipping routes beyond the immediate vicinity of the Strait of Hormuz.

Despite ongoing backchannel discussions, diplomatic progress remains uncertain.

Trump has claimed that Tehran agreed to most elements of a proposed 15-point ceasefire plan, though Iranian officials have publicly rejected the framework and insisted on retaining control over the Strait of Hormuz.

Meanwhile, reports suggest that the U.S. has also considered deploying ground forces to seize Kharg Island, a critical hub responsible for the majority of Iran’s crude exports.

Experts caution that such a move could significantly escalate the conflict, increasing both casualties and financial costs.

Shipping activity through the Strait of Hormuz which typically accounts for around one-fifth of global seaborne oil trade has slowed dramatically since the conflict erupted in late February, raising concerns over prolonged supply disruptions and continued volatility in global energy markets.

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