Why Oil Prices Crashed After Trump Said the War Could End Soon

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Oil Prices Plunge After Trump Says the War Could End Soon
What Iran’s Missile Statement May Actually Mean

Global oil prices swung sharply within a single day. WTI crude reportedly rose as high as $120 intraday, then fell back toward the $85 range after Trump’s remarks.

The market reacted mainly to two developments.

• Trump’s comments suggesting the war could end sooner than expected
• A missile-related statement from Iran’s Islamic Revolutionary Guard Corps

At first glance, the two messages appeared to point in different directions. But because they emerged at nearly the same time, the market interpreted them as a signal that the conflict might end sooner than previously expected.

1. The Market Reacted First to Trump’s Interview

In the early hours of the Asian trading day, Trump gave a phone interview to CBS.

In that interview, he said the following.

• Iran’s naval forces, air power, and communications systems had been severely weakened
• Military operations were progressing faster than expected
• The war could end sooner than many had anticipated

In particular, when he suggested that an operation initially expected to take four to five weeks might finish much sooner, markets began pricing in the possibility that war-related risk could decline more quickly than expected.

That was the point at which both oil prices and equity markets began to move.

2. Then Came the Republican Workshop Speech

Later, Trump delivered a speech at a workshop attended by Republican lawmakers.

The core message of that speech was as follows.

• The military campaign related to Iran could be completed in a relatively short time
• Iran’s capacity to sustain combat had already been significantly degraded
• Dozens of Iranian naval vessels had reportedly been destroyed
• Drone production facilities were also being targeted

In other words, the message was less about negotiations and more about bringing the conflict to a rapid close through overwhelming military pressure.

This was followed by reports that G7 countries were considering the possible use of strategic oil reserves, which added to the downward pressure on crude prices.

3. But Iran’s Statement Also Came at Almost the Same Time

What made the situation more interesting was that shortly before Trump’s remarks, there had also been a statement from the commander of the IRGC Aerospace Force.

He reportedly said the following.

“From now on, missiles with warheads weighing less than one ton will no longer be launched. Instead, range will be extended and launch frequency will increase.”

At first hearing, the meaning of that statement was not entirely obvious. But from a military perspective, there are at least two possible interpretations.

4. The First Interpretation: A Shortage of Launch Platforms

Iran is widely believed to possess a large missile inventory, but the number of available transporter-erector-launchers (TELs) may be falling quickly.

Some analyses suggest that before the war there may have been around 480 such launch platforms, while current estimates in some circles place the number closer to 120.

The reason is straightforward.

Once a missile is launched, the launcher’s position can be exposed, and Israeli and U.S. forces may then detect and destroy that platform.

If launch platforms are becoming scarce, then a logical response would be to prioritize more destructive missiles per launch.

Among Iran’s better-known heavier missile systems are the following.

• Khorramshahr-4: 1.5-ton warhead / range of around 2,000 km
• Sejjil-2: solid-fuel missile / range of around 2,000–2,500 km
• Emad: a precision-guided ballistic missile

In that sense, the statement about suspending missiles under one ton could be interpreted as meaning Iran intends to rely more on heavier and more destructive systems.

5. The Second Interpretation: A Strategy to Drain Air Defense Systems

Another line of analysis is that Iran’s attacks may still be unfolding according to a broader operational plan.

Missiles heading toward Israel can be intercepted during the midcourse phase, which makes long-range strikes difficult and costly.

Because of that, some analysts believe Iran may first be targeting nearby U.S. bases and regional air-defense networks in order to consume defensive interceptors and reduce the effectiveness of the broader missile shield.

Under that interpretation, the current phase would not necessarily represent the peak of the confrontation, but rather preparation for a potentially more serious wave of attacks later.

6. Trump’s Additional Press Conference

Trump later held another press conference.

The key points of that appearance were as follows.

• More than 5,000 targets had already been struck
• Some assessments suggested the operation was nearing completion
• The safety of maritime traffic through the Strait of Hormuz would be secured
• If Iran continued threatening closure or disruption, additional infrastructure could be targeted

When reporters asked whether the war would end within a week, Trump answered as follows.

“It will end soon. But not this week.”

7. The Market’s Reaction

At first, hopes for a relatively early end to the conflict pushed WTI sharply lower.

But soon after, the market began asking a new question: Is the war really close to ending?

As that doubt spread, oil prices rebounded again to around $89 per barrel.

One-line comment

The key uncertainty is whether Trump’s word “soon” means what the market wants it to mean. That is why oil prices fell sharply at first, but then began to recover.

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