Brent crude oil experienced its largest single-day price swing in history, touching $120 per barrel before falling back to $90, with the trigger being just one statement from Trump. However, UBS issued a warning that even if political signals point toward de-escalation, the real test for the oil market will be whether actual cargo flows through the Strait of Hormuz can resume.
According to reports, on March 9 Eastern Time, Trump publicly stated that hostilities with Iran were "nearly over" and "ahead of schedule," which the market interpreted as a potential ceasefire signal. Crude oil prices subsequently accelerated their decline, with U.S. crude plunging more than 31% from its intraday high and closing down 7% from Friday's settlement, while Brent crude fell by 4.67%.
UBS characterized Trump's remarks as "a possible first sign of potential de-escalation," using cautious language. The research report also listed major uncertainties that remain:
When the U.S. and Israel will actually cease strikes against Iran; Whether Iran will likewise halt regional attacks and cease threatening shipping through the Strait of Hormuz.
In other words, Trump's signal does not equate to a resolution of the crisis. Only if the above two conditions materialize in the coming days will the situation truly approach the baseline scenario outlined in UBS's recent oil price update report.
Under the baseline scenario, UBS forecasts that Brent crude will fall back to the $70 per barrel range by the second quarter of 2026. However, a key variable is already trending beyond the model's assumptions.
Data from Argus shows that actual production halts on March 9 ranged between 6.2 million and 6.9 million barrels per day, while UBS's baseline assumption for March was approximately 3 million barrels per day in halted production—nearly double the forecast.
UBS clearly stated in its report that the actual scale of production halts may slightly exceed the baseline scenario, which could keep oil prices at moderately elevated levels for an extended period. In other words, even if the situation moves toward de-escalation, the pace and extent of oil price declines may not be as smooth as previously expected.
UBS highlighted that several major variables remain: when the U.S. and Israel will halt strikes, whether Iran will simultaneously cease regional attacks, and whether threats to shipping in the Strait of Hormuz can be lifted. If the situation effectively de-escalates within days, approaching UBS's baseline scenario from last week, Brent could retreat to the $70 range by the second quarter of 2026.
According to UBS's "Strait of Hormuz Shipping Tracker," the number of oil and gas tankers passing through the Strait daily fell sharply from around 50 in February to just one or two currently.
"Regardless of how the conflict evolves, we believe that cargo flows of oil and gas through the Strait of Hormuz will be the most critical data to watch in the near term. Both the duration of disruptions and the pace of traffic recovery will be crucial for market direction."
