But the main question of how long the war will last remains unanswered: File Image/Pixabay

U.S. president Donald Trump promising the U.S. military will escort oil tankers through the Strait of Hormuz and provide insurance dented a two-day rally of oil prices on Tuesday that had been driven by disruption fears – however, escalating combat between the U.S. and Iran and other Middle Eastern countries guaranteed continued market volatility.

In early morning trading, Brent jumped 7.9 percent to $83.95 per barrel and West Texas Intermediate climbed 8,7 percent to $77.46; but following Trump’s statement, Brent settled up $3.66, or 4.7 percent, at $81.40 per barrel.

WTI settled up $3.33, or 4.7 percent, at $74.56.

Trump also acknowledged that oil prices are “a little high” but “those prices are going to drop” when the conflict ends.

China on Tuesday called on all combatants to ensure the safe passage of ships through Hormuz; Indonesia moved to source its crude needs from the U.S. instead of relying on Middle East shipments; and Saudi Arabia was said to be debating whether to deliver more barrels from the Red Sea (although Iran-backed Houthi militants have threatened to resume attacks on vessels in the region).

Standard Chartered wrote in a note, “Iran’s retaliation has been broader than its previous, mostly symbolic measures, and its approach has resulted in several regional flashpoints posing real risk to supply.”

The reigning question of how long the fighting will last remained a main point of debate for the analytical community on Tuesday; Trump said U.S. and Israel attacks were intended to last up to five weeks but could extend beyond that time frame; the brash billionaire also declared that many Iranian naval and air targets have been eliminated and that Tehran’s ability to launch missiles will soon follow.

Phil Flynn, senior market analyst with Price Futures Group Inc., concluded, , “Trump said Iran is not going to keep this fight up for longer...so the market is thinking there might be a quicker resolution than previously feared.”

In other oil news on Tuesday, the American Petroleum Institute estimated that U.S. crude inventories rose by 5.6 million barrels in the week ending February 27 compared with expectations of a 2.2 million barrel build; but gasoline inventories fell by 3.3 million barrels in the same time frame.