Trump Says Iran War 'Very Complete' — Oil Gives Back Two Weeks of Gains in Hours

The War Premium Unwinds

Since U.S.-Israeli strikes on Iran began on February 28, crude oil had climbed roughly 50% — from around $66 a barrel to a session high of $119.48 on Sunday night as Iran's retaliatory closure of the Strait of Hormuz choked off approximately 20% of global oil supply. Shipping through the waterway had effectively halted, with few tanker operators willing to risk Iranian fire.

Then it reversed. By 4 p.m. ET Monday, WTI had fallen to roughly $86, down from $119 in the span of hours. Brent followed, dropping below $89. The USOIL perp, which tracks the USO ETF — a vehicle that rolls near-month WTI futures — fell 24% over the same window as the war premium unwound.

Trump's CBS Interview

The catalyst was a phone interview Trump gave CBS from his Doral golf club Monday afternoon. He called the war "very complete, pretty much," claimed Iran had "no navy, no communications... no air force," and said the U.S. was "thinking about taking over" the Strait of Hormuz.

The market read it as an off-ramp. If the conflict was winding down and Washington was prepared to force the strait open with military escorts, the supply disruption premium embedded in crude had no reason to exist at $119. Traders liquidated long positions immediately — WTI dropped 13.7%, roughly $13 a barrel, in the first move after the interview aired.

At a subsequent press conference in Florida, Trump added that the war would end "very soon" and said he would consider waiving oil-related sanctions — additional headlines that kept downward pressure on crude through the close.

Hormuz Is Still Closed

Despite Trump's rhetoric, shipping through the Strait of Hormuz has not resumed. The U.S. Navy's ability to escort commercial tankers through contested waters at scale remains an open question. Iraq and Kuwait have already cut output by 70% and declared force majeure on exports due to storage constraints.

G7 finance ministers held an emergency video call Monday to discuss a coordinated release of strategic petroleum reserves but stopped short of action, with France's finance minister stating "we are not there yet." The decision to hold reserves in pocket rather than deploy them suggests policymakers expect further volatility.

Crude remains roughly 30% above pre-war levels even after the reversal. The question is whether Trump's words translate to an actual reopening of the strait — or whether the market just front-ran a resolution that hasn't happened yet.

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