Oil Prices Fall 1% Amid Signals of Possible End to US-Iran Conflict; Can Crude Drop to $100 per Barrel?

Crude Oil Prices Decline After Recent Rally​

Oil prices edged lower on Tuesday, March 31, snapping a recent gaining streak after reports indicated that US President Donald Trump may be open to ending the ongoing conflict with Iran.

Brent crude futures for May declined by $1.22, or 1.08%, to $111.56 per barrel, after rising nearly 2% earlier in the session. The more actively traded June contract was quoted at $105.76.

US West Texas Intermediate (WTI) crude futures for May fell 98 cents, or 0.95%, to $101.90 per barrel, after touching their highest level since March 9 during early trading.

Trump Signals Possible De-escalation​

Market sentiment shifted after reports suggested that Donald Trump had told aides he may consider halting military action against Iran, even if the Strait of Hormuz remains largely closed for now.

However, the US stance remains firm. On Monday, Trump warned that the US would target Iran’s energy infrastructure and oil facilities if Tehran fails to reopen the key shipping route.

The Strait of Hormuz is a critical global oil transit route, handling nearly one-fifth of the world’s oil supply along with significant volumes of liquefied natural gas. Its effective closure has been a major driver behind the recent surge in crude prices.

Geopolitical Risks Keep Markets Volatile​

Despite the latest dip, geopolitical tensions continue to influence oil markets.

Brent crude has surged 59% in March, marking its biggest monthly gain on record, while WTI crude has climbed 58%, its strongest rise since May 2020.

Adding to supply concerns, Kuwait Petroleum Corporation reported that one of its fully loaded crude tankers, Al Salmi, with a capacity of up to 2 million barrels, was hit in an alleged Iranian attack at a Dubai port. Authorities also warned of potential oil spills in the region.

Further risks emerged after Yemen’s Iran-backed Houthi forces launched missile strikes toward Israel, raising concerns about disruptions at the Bab el-Mandeb Strait, a key maritime corridor connecting the Red Sea and the Gulf of Aden.

Crude Oil Outlook: Can Prices Drop to $100?​

Analysts indicate that crude oil prices are likely to remain volatile in the near term, driven by geopolitical developments.

Aamir Makda, Commodity and Currency Analyst at Choice Broking, said crude prices continue to trade above key moving averages, with support levels at 8416, 7325, and 6575. He added that resistance is seen at the psychological level of 10,000, and a breakout above this could push prices higher.

Sugandha Sachdeva, founder of SS WealthStreet, said Brent crude is likely to trade within a wide range, with key support levels at $93 and $73 per barrel. On the upside, a retest of $120 remains possible, with a potential move toward $150 if geopolitical tensions intensify further.

She noted that oil markets remain driven by geopolitics, with supply disruptions, strategic reserve actions, and policy responses continuing to shape price trends in the near to medium term.