NEW YORK — Oil prices pulled back in early Asian trading on Tuesday as President Donald Trump signaled a potential willingness to de-escalate U.S. military operations in Iran, even if the strategically vital Strait of Hormuz remains closed. West Texas Intermediate futures for May delivery fell 0.72% to $102.14 a barrel as of 10:31 p.m. ET, while May Brent crude futures declined 1% to $111.55 a barrel. The shift came amid ongoing hostilities in the fifth week of the Iran war, which began on February 28 and has severely disrupted global energy supplies.
Trump's latest remarks, reported by The Wall Street Journal late Monday, indicated to his aides that he is prepared to end U.S. operations against Iran without forcing Tehran to reopen the Strait of Hormuz, a key oil chokepoint. According to the report, such a move could prevent further prolongation of the conflict, which has already seen shipping traffic through the waterway — responsible for about a fifth of the world's seaborne oil shipments before the war — come to a virtual standstill.
Earlier in the day, however, Trump had issued stark threats of escalation. In a post on Truth Social, the president warned that if Iran does not reopen the Strait and agree to a peace deal, "we will conclude our lovely 'stay' in Iran by blowing up and completely obliterating" its electricity plants, oil facilities, and "possibly" desalination infrastructure. The comments targeted civilian energy sites, including water desalination plants, raising concerns about humanitarian impacts in a nation already strained by weeks of conflict.
The volatile rhetoric underscores Trump's pattern of alternating between diplomatic overtures and military warnings. On Monday, he told reporters that Tehran had agreed to "most of" a 15-point U.S. ceasefire proposal. Yet Iranian officials have publicly rejected the terms, countering with their own conditions that include retaining control over the Strait of Hormuz.
Adding to the regional tensions, Iran struck a fully laden Kuwaiti oil tanker in the anchorage area of Dubai's port early Tuesday. "Authorities in Dubai continue firefighting operations in response to the incident involving a Kuwaiti oil tanker," the Dubai government said in a social media post, noting that no injuries have been reported. The attack highlights the broadening scope of hostilities, with Iran's actions now extending to neutral shipping in the Persian Gulf.
Trump has reportedly considered more aggressive options, including the deployment of ground forces to seize Kharg Island, a critical hub that handles 90% of Iran's crude oil exports. Such an operation, experts caution, could lead to significant U.S. casualties and drag out the war's duration and expense. Analysts have warned that any ground incursion risks entangling American troops in a protracted fight, potentially destabilizing the region further.
The conflict's roots trace back to February 28, when initial clashes erupted, escalating rapidly into a full-scale war. U.S. involvement intensified as Trump ordered strikes on Iranian military targets, aiming to pressure Tehran into negotiations. The Strait of Hormuz closure has sent shockwaves through global markets, with oil prices surging in recent weeks before the latest pullback.
Market watchers noted the reversal in prices as traders parsed Trump's mixed signals. While some reports, including a CNBC headline, suggested oil prices were extending gains on fears of escalation from Trump's threats, the actual trading data showed a downturn following the de-escalation hints. "The market is whipsawing on every tweet and statement from the White House," said one energy analyst, speaking on condition of anonymity due to the sensitivity of ongoing trades.
Iran's response to the U.S. proposals has been firm. Tehran has dismissed the 15-point ceasefire as one-sided, insisting on guarantees for its sovereignty over key waterways. Iranian state media reported that any agreement must address what they describe as American aggression, including the initial U.S. strikes that prompted the Hormuz blockade.
The Kuwaiti tanker incident drew swift condemnation from Gulf states. Kuwaiti officials confirmed the vessel was carrying a full load of crude bound for Asian markets when it was targeted. Dubai's port authorities mobilized emergency teams, with firefighting efforts ongoing into Tuesday afternoon local time. No group immediately claimed responsibility, but the strike bore hallmarks of Iranian proxy operations in the area.
Beyond the immediate military flashpoints, the war's economic toll is mounting. With Hormuz traffic halted, alternative routes like the Strait of Bab el-Mandeb have seen increased congestion, driving up shipping costs and insurance premiums. Global oil inventories are under pressure, and experts predict sustained high prices unless a breakthrough occurs soon.
Trump's vacillations have frustrated allies and adversaries alike. European leaders, in a joint statement Monday, urged restraint and called for multilateral talks under United Nations auspices. "Escalation benefits no one; diplomacy must prevail," said a spokesperson for the European Union foreign policy chief.
In Washington, congressional Democrats criticized the administration's approach as erratic, while Republicans largely backed Trump's tough stance. House Speaker Mike Johnson, R-La., said in a statement that "America must not blink in the face of Iranian aggression." Senate Minority Leader Chuck Schumer, D-N.Y., countered that the threats to civilian infrastructure violate international norms and could isolate the U.S. diplomatically.
Looking ahead, the next few days could be pivotal. Trump is scheduled to meet with national security advisors Wednesday to review intelligence on Iranian movements. Meanwhile, envoys from Oman, a neutral mediator, are reportedly shuttling between Washington and Tehran in hopes of bridging the ceasefire gap.
The broader implications for global energy security remain stark. A prolonged closure of the Strait could push oil prices toward $120 a barrel or higher, analysts say, exacerbating inflation worldwide. For consumers in the U.S. Midwest, including Appleton, Wisconsin, that could mean gasoline prices topping $5 a gallon by summer. As the conflict enters its sixth week, the world watches anxiously for signs of resolution — or further chaos.