Crude Oil Price Crash To Below $90: 3 Reasons Why Oil Prices Fell, Is The Worst Over In Middle East?

The crude oil prices globally crashed steeply for the first time since the US and Israel declared war against Iran. US WTI Crude Oil Futures dropped by nearly 5% to below $90 per barrel, while Brent Crude plunged to below $95 per barrel. Three major factors around the world played a key role in dragging oil prices from their stubborn rally to $120 per barrel, which toppled stock markets globally.

3 Reasons Why Crude Oil Prices Are Falling

1. Iran War To End Soon?

During a press conference in Florida on March 9, US President Donald Trump hinted that the war with Iran will end soon but the Islamic regime will be hit harder if they start up again.

"It's going to end soon, and if it starts up again they'll be hit even harder," he told the media. US and Israel have been carrying a coordinated airstrikes on Iran since February 28, 2026, eliminating key top command chains of Iran including Ali Khamenei the supreme leader of nearly four decades.

Trump has also expressed his disappointment in the appointment of Iran's new supreme leader Mojtaba Khamenei, a move that is expected to continue the same problems for the people of Iran.

3. US Sanctions Waiver:

To ease the tensions at the Red Sea that has spiral the oil markets into panic, Trump is planning to implement temporary waivers on specific oil-related sanctions to ensure the transitions at Strait of Hormuz is seamless.

He told the media yesterday that "We're also waiving certain oil-related sanctions to reduce prices. So we have sanctions on some countries. We're going to take those sanctions off until this straightens out."

Recently, US granted waiver of 30 days to allow India in buying Russian Oil from ships that are stranded at the Hormuz. However, Indian government has stayed firm in buying Russian oil.

In a statement, the Centre said, "India has never depended on permission from any country to buy Russian oil," adding, "India is still importing Russian oil even in February 2026, and Russia is still India's largest crude oil supplier."

3. G7 Nations Oil Reserves:

In an emergency meeting on March 9, the G7 nations calmed the investors by stating that they are ready to take "necessary measures" to support the global supply of energy. G7 stated that they have the option of releasing oil reserves. However, the G7 finance ministers and the International Energy Agency (IEA) ended without any sign of agreement.

US WTI Crude Oil Futures:

US WTI Crude Oil Futures with April 2026 Expiry, traded at $89.89 per barrel, down by 5.2%. This oil benchmark touched an intraday low of 84.45 and recorded an overall decline of 29.3% from $119.43 per barrel level that was touched on March 9th. The near $120 per barrel mark is the highest in many years.

Yesterday, US WTI plunged nearly 18%.

Brent Crude Oil Price:

Brent crude has nosedived by nearly 26.2% and touched an intraday low of $88.10 per barrel. This is compared to $119.50 per barrel mark it hit on March 9.

Yesterday, the price dropped nearly 9%.

Despite this, crude oil prices have rallied over 22% each in the past 10 days.

Is The Worst Over In Middle East?

While Trump has announced various plans to calm the tensions in the oil market, he has not specifically mentioned any dates or timeframe. A similar statement was made by Israel's prime minister Benjamin Netanyahu earlier this month.

According to Netanyahu, the war with Iran will not be an 'endless war' but will end in a quick and decisive action. However, it may take some but won't take years.

Hence, the situation in Middle East continues to be dire. Even if the war ends let's say this week, the economies in the conflicted west Asia will need months to regain stability.

Where Is Oil Prices Ahead?

"We believe crude oil markets have entered a geopolitical risk-premium phase, with prices increasingly driven by supply security concerns rather than underlying demand fundamentals. The ongoing US-Israel-Iran conflict and disruption around the Strait of Hormuz has materially tightened the near-term supply outlook and pushed crude above $100/bbl for the first time since 2022," said Maulik Patel, Head of Research - Equirus Securities.

"If war last for longer and limited volume pass through strait of Hormuz than oil price can reach very high level than its current level and only demand reduction can bring some kind of relief to the oil price," Patel said.

According to Choice Institutional Equities, to explain the current oil price environment, we split the trajectory of rise in oil prices into three parts: (i) the initial supply shock (below $ 90/b), (ii) precautionary demand necessitated by hoarding and inventory builds ($ 90 to 130/b), and (iii) a scarcity premium that ultimately forces demand destruction (beyond $ 130/b).

"Despite a physical disruption of 7-11 mb/d, the 17% surge in Brent suggests the market is pricing a much larger effective deficit of ~20 mb/d, reflecting precautionary demand and panic-driven hoarding," analysts at Choice said.

If US-Israel intervention leads to renewed negotiations and the reopening of the Strait of Hormuz, Brent prices could retreat towards $ 80/b over the coming weeks. This would largely reflect the unwinding of the precautionary demand premium, although a residual geopolitical risk premium may persist.

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.