WTI dropped below $100 a barrel for the first time since the Iran war began. The July contract fell 9.33% to $98.57, dragged down by a one-two punch: Trump telling reporters oil would "come plummeting down" and the Senate voting to strip him of the authority to keep fighting without congressional approval.
Brent lost 6.01%, settling at $104.97. Two days ago both benchmarks were above $110.
Three bearish signals in 24 hours
The selloff started when Trump shelved a planned strike on Iran late Sunday, telling Gulf allies he would give diplomacy two to three more days. That alone knocked several dollars off both benchmarks overnight.
Then Trump went further. At the White House on Tuesday he said the war would end "very quickly" and that prices had only one direction to go. "There's so much oil out there, they're going to come plummeting down," he told reporters. He gave Iran until "Friday, Saturday, Sunday" to accept a deal.
Hours earlier, the Senate had voted 50-47 to block further military action against Iran without congressional sign-off. The War Powers Resolution had failed seven times before. This time, four Republican senators crossed the aisle. Trump is expected to veto, but the vote signals growing political pressure to wind down the conflict. Average US gasoline has climbed past $4.50 a gallon since the war began, up from under $3 before the first missiles flew.
The demand side is cracking
The price drop is not just about deal optimism. The IEA's May report forecast that global oil demand will shrink by 420,000 barrels a day this year, the first contraction since the pandemic. Second-quarter demand alone is running 2.45 million barrels a day below where it stood a year ago. Jet fuel now costs roughly three times what it did before the war, and Asian refiners have been scaling back runs for weeks.
That demand destruction is doing what OPEC production cuts never could on their own: putting a ceiling on prices even while the Strait of Hormuz stays shut.
What changed on the futures curve
WTI's break below $100 also reflects the contract roll. The June contract expired Wednesday and the July front month started the day cheaper by several dollars. Still, the size of today's move goes well beyond mechanics. A 9% single-session drop prices in a real possibility that the war ends this week, or at least that Trump believes it will.
The gap between what Trump is saying and what Iran has actually agreed to remains wide. Tehran's 14-point proposal avoids nuclear issues entirely. Washington wants a written pledge to abandon weapons development. If Friday passes without a deal, the market could snap back just as fast. But for now, crude is trading on the assumption that Trump means what he says, and he says it is almost over.