US stocks were little changed on Tuesday as oil prices dropped after President Trump signaled the war in Iran will be limited – though the drop slowed after the White House walked back a claim that an oil tanker had been escorted through an Iranian energy chokepoint.
The Dow Jones Industrial Average fell 34 points, while the Nasdaq was flat and the S&P 500 edged down after President Trump said the war was “very complete, pretty much,” and G7 energy ministers met to discuss the potential release of oil reserves.
West Texas Intermediate crude oil and Brent crude each plummeted to near the $80 level after surging to levels near $120 the previous day, though later in the day they recovered to $83.45 and $87.80, respectively.
On Tuesday afternoon Energy Secretary Chris Wright deleted a social media post claiming the US Navy had successfully escorted an oil tanker through a key Iranian waterway known as the Strait of Hormuz, which carries 20% of the world’s oil supply.
During a press briefing Tuesday afternoon, White House press secretary Karoline Leavitt said she has not yet spoken to Wright about the post, but confirmed that it was inaccurate.
“I can confirm that the US Navy has not escorted a tanker or a vessel at this time, though of course that’s an option the president has said he will absolutely utilize if and when necessary at the appropriate time,” she told reporters.
The Department of Energy did not immediately respond to The Post’s request for comment.
House Intelligence Committee Chairman Rick Crawford (R-Ark.) told The Post that a US Navy escort eventually would help “start to resume traffic” in the Strait of Hormuz, calling it “a logistics issue,” “not a supply issue.”
“The issue we’re going to have is, at least in the short term, is the potential for the Houthis to launch. They’re in range,” Crawford noted, adding that it’s unclear whether the terror group still has the capacity to attack vessels.
“There is going to be a physical presence, not just of Pakistan, but others that are helping to sort of police the Strait of Hormuz to address this issue,” he added. “It’s not about supply, it’s about moving that supply through a difficult corridor.”
Earlier in the day, Trump called for total surrender and War Secretary Pete Hegseth said Tuesday morning that it would be the “most intense day of strikes” on Iran – adding the war will end “on our timeline.”
“This is a wild one,” said Jeff Krimmel, founder of Krimmel Strategy Group, reacting to the nearly $40 swings in price for major oil benchmarks. “The president can say one thing one day and then can say a very different thing either later the same day or the next day.”
“If the president now says that the war is ‘very complete, pretty much,’ I think the markets want to believe that.”
National average gasoline prices, meanwhile, hit $3.54 a gallon Tuesday, and diesel – which could have a ripple effect across the economy – reached $4.78, according to AAA.
There is typically a one- to two-week lag between oil and gasoline prices, and there might also be an impact as Iraq and Kuwait have started shutting down production from some oil fields, Krimmel said.
“Either this is kind of the end of the real whackiest oil markets and it gets calmer from here, or it’s gonna get really, really choppy again,” Krimmel told The Post. “I would lean toward it’s going to be more calm going forward from here.”
“When the markets respond sufficiently negatively to something, that could absolutely encourage this administration to back off,” said Krimmel, nodding to the Trump administration’s back-and-forth approach on tariff rates.
Oil prices are still elevated compared to levels on Feb. 27, a day before the joint US and Israeli air strikes on Iran, when WTI crude was $67.67 and Brent hit $72.88 a barrel.
This story originally appeared on NYPost
