Oil Prices Retreat after nearing $120 as Trump Floats Idea of U.S. Control over Strait of Hormuz
Key Developments
- Oil prices drop after nearing $120 amid tensions around the Strait of Hormuz and statements from U.S. President Donald Trump.
- G7 energy ministers consider releasing strategic oil reserves to stabilize global markets.
- Major Middle Eastern producers reduce output as shipping disruptions and security concerns slow tanker movement through the vital waterway.
Washington (CNBC) — March 10, 2026: Global oil prices eased in extended trading on Monday after earlier surging close to $120 per barrel, as tensions surrounding the Strait of Hormuz disrupted supplies and raised fears of a major energy crisis.
The decline came after U.S. President Donald Trump indicated that Washington is considering taking control of the strategic Strait of Hormuz, a maritime chokepoint through which roughly 20 percent of the world’s oil exports pass.
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In a phone conversation with CBS News, Trump said ships had begun moving through the waterway again but added that he is “thinking about taking it over.” He also expressed the view that the ongoing conflict involving Iran might conclude soon.
Oil Prices Show Sharp Volatility
During Monday’s trading session, U.S. crude oil prices fell more than 6 percent to around $85 per barrel, while the global benchmark Brent crude declined to approximately $88 per barrel in extended trading.
Earlier, however, markets experienced extreme volatility. West Texas Intermediate (WTI) had closed the day higher near $94.77 per barrel after touching $119.48 overnight, reflecting concerns about supply disruptions. Brent crude similarly climbed above $100 per barrel for the first time since the Russian invasion of Ukraine.
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Energy analysts attribute the spike to reduced output from Gulf producers and fears that tanker traffic through the Strait could be halted due to escalating regional tensions.
G7 Considers Emergency Oil Reserve Release
Amid the market turmoil, energy ministers from the Group of Seven (G7) are scheduled to hold a virtual meeting to discuss the possibility of releasing oil from strategic reserves to stabilize supply.
Earlier discussions among G7 finance ministers also addressed the potential impact of the Iran conflict on global energy markets. In a joint statement, the ministers said they were “ready to take necessary measures, including to support global supply of energy such as stockpile release.”
The G7 includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
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Shipping Disruptions Hit Global Supply
Security concerns in the region have significantly reduced tanker traffic through the Strait of Hormuz. Energy analysts report that only a limited number of commercial vessels are currently navigating the route, which has raised fears of the largest oil supply disruption in modern history.
Experts warn that prolonged disruption could have severe consequences. According to market forecasts, Brent crude could reach $135 per barrel if the situation continues for four months, while even a two-month disruption could push prices beyond $110 per barrel.
Middle Eastern Producers Cut Output
Several major oil-producing states in the Gulf have also reduced production due to logistical constraints and security risks.
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- Kuwait, one of OPEC’s largest producers, announced precautionary cuts to production and refinery operations after warning of threats to shipping.
- Output in Iraq has reportedly dropped sharply, with production from key southern fields falling by nearly 70 percent.
- The United Arab Emirates said it is carefully managing offshore output levels as storage capacity fills amid shipping delays.
A satellite image shows the Strait of Hormuz, a key maritime passage connecting the Persian Gulf to the Gulf of Oman, vital for global energy supply. (Getty Images).
Iran Warns Tankers to Remain Cautious
Meanwhile, officials in Iran cautioned maritime operators about the security situation in the region. Iranian Foreign Ministry spokesman Esmail Baghaei said oil tankers “must be very careful” while navigating regional waters amid the ongoing tensions.
Energy experts say that until security concerns are addressed and tanker traffic normalizes, global oil markets may continue to experience sharp fluctuations, affecting fuel prices and economic stability worldwide.
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