Global oil prices fell sharply on Tuesday after surging to their highest levels in more than three years in the previous session, as signals of possible diplomatic progress in the Middle East eased fears of prolonged supply disruptions.

Brent crude futures fell $6.51, or 6.6 per cent, to $92.45 a barrel at 0018 GMT, while U.S. West Texas Intermediate (WTI) crude dropped $6.12, or 6.5 per cent, to $88.65 a barrel.

The decline followed comments by US President Donald Trump suggesting that the war in the Middle East could end soon, raising hopes in the market that tensions affecting global oil supplies may begin to ease.

Oil markets had rallied strongly on Monday, with both Brent and WTI briefly surging above $100 a barrel. During the session, Brent touched a high of $119.50 a barrel while WTI reached $119.48, the highest levels since mid-2022. The spike was driven by fears that the expanding U.S.-Israeli war with Iran, combined with supply cuts by Saudi Arabia and other producers, could significantly disrupt global crude flows.

However, prices later retreated after reports that Russian President Vladimir Putin had spoken with Trump and shared proposals aimed at reaching a quick settlement to the Iran conflict, according to a Kremlin aide. The development helped calm markets concerned about a prolonged disruption to supplies from the Middle East, which accounts for a substantial share of global oil production.

Market analysts said the sharp swings in prices reflected the extreme sensitivity of oil markets to geopolitical developments. “The market is trading almost headline by headline,” one energy analyst said, noting that any indication of escalation or de-escalation in the region could trigger large price movements.

Despite Tuesday’s pullback, traders said volatility is likely to remain elevated in the near term as investors closely monitor diplomatic efforts and the security of key energy shipping routes in the region.