Oil prices plummeted 7% on Tuesday after soaring to a more than three-year high in the previous session as U.S. President Donald Trump predicted the war in the Middle East could end soon, easing concerns about prolonged disruptions to oil supplies.

Brent futures were down $6.75, or 6.8%, to $92.21 a barrel at 1012 GMT, while U.S. West Texas Intermediate (WTI) crude was down $6.41, or 6.8%, to $88.36 a barrel. Both contracts fell as much as 11% earlier.

Volumes in Brent dropped to about 213,000 contracts, the lowest amount since February 27, just before the start of the conflict. Volumes in WTI fell to 212,000, the lowest since February 20. 

Oil surged to more than $119 barrel on Monday to its highest since mid-2022 as supply cuts by Saudi Arabia and other producers stoked fears of major disruptions to global supplies.

Prices later retreated after Russian President Vladimir Putin held a call with Trump and shared proposals aimed at a quick settlement to the war, according to a Kremlin aide, easing concerns about supply. 

Trump said on Monday in a CBS News interview that he thought the war against Iran was "very complete" and Washington was "very far ahead" of his initial four- to five-week estimated timeframe.

"Clearly Trump’s comments about a short-lived war have calmed markets. While there was an overreaction to the upside yesterday, we think there is an overreaction to the downside today," said Suvro Sarkar, energy sector team lead at DBS Bank, adding that the market was underappreciating risks at these levels for Brent. 

"Murban and Dubai grades are still well above $100 per barrel, so practically nothing much has changed in terms of ground realities," he added, referring to benchmark Middle Eastern oil grades.

In response to Trump, Iran’s Islamic Revolutionary Guards Corps said they would "determine the end of the war" and Tehran would not allow "one litre of oil" to be exported from the region if U.S. and Israeli attacks continued, state media reported on Tuesday.

Meanwhile, Trump is considering easing oil sanctions on Russia and releasing emergency crude stockpiles as part of a package of options aimed at curbing spiking prices, according to multiple sources.

"Discussions around easing sanctions on Russian oil, comments from Donald Trump hinting that the conflict could eventually de-escalate, and the possibility of G7 countries tapping strategic oil reserves all pointed to the same message - that oil barrels will somehow continue to reach the market," Priyanka Sachdeva, a Phillip Nova analyst, said in a note on Tuesday. 

"Once traders sensed that supply routes could still be maintained, the initial ’panic premium’ that had pushed prices above the $100 mark yesterday started to fade, and oil prices quickly pulled back."

Goldman Sachs said because the situation remains fluid, it was not changing its oil price forecast for Brent at $66 per barrel in the fourth quarter 2026 and WTI at $62 per barrel. 

G7 nations said on Monday they were prepared to implement "necessary measures" in response to surging global oil prices but stopped short of committing to the release of emergency reserves.