Men watch from a hillside as a plume of smoke rises after an explosion in Tehran, Iran.

• US President Donald Trump said the US-Israel war on Iran would be ending earlier than thought.
• Oil prices decreased as a result.
• But Trump warned Iran not to block oil supplies coming through the Strait of Hormuz.

Oil prices tanked and equities rallied on Tuesday following a wild day of swings that came after US President Donald Trump said the US-Israel war on Iran would be ending earlier than thought.

As the crisis in the crude-rich Middle East continued into a second week, with seemingly little sign of a conclusion on the horizon, Trump said that the campaign was far ahead of his initial timeline of around a month.

“I think the war is very complete, pretty much. They have no navy, no communications, they’ve got no air force,” Trump told CBS News by phone.

“If you look, they have nothing left. There’s nothing left in a military sense,” he added.

Trump told the US broadcaster that the United States was “very far” ahead of his initially stated war time frame of four or five weeks.

READ | Shrapnel kills man, injures 11 in Israel as Iran launches missile strike

He later told a news conference in Florida that “it’s going to be ended soon, and if it starts up again, they’ll be hit even harder.”

When asked if he thought the war could end in days or weeks, he replied: “I think soon. Very soon.”

The US leader also threatened an attack of “incalculable” size if Tehran blocks oil supplies coming through the Strait of Hormuz, through which a fifth of global supplies pass.

His remarks come just days after he issued a statement saying Iran’s “unconditional surrender” was the only acceptable outcome for ending the war, which sent shivers through markets fearing an elongated war.

Still, Iran’s Revolutionary Guards responded by saying that they, not the Americans, would “determine the end of the war”.

Investors jumped on the comments, sending crude prices plunging around 10% on Tuesday.

That came a day after extreme swings that saw the commodity rocket 30% to a peak above $119 a barrel before plunging to as low as $84.

The recovery had already begun earlier on Monday after it emerged that finance ministers from the Group of Seven industrialised nations would discuss tapping stockpiles to ease supply constraints.

Trump also said he would waive some Ukraine war-linked sanctions on Russian oil sales to India, with White House officials reassuring G7 partners that the move would only be temporary.

And Asian stock markets rallied, with Seoul up more than 6% and Tokyo gaining more than 3%.

There were also healthy advances in Hong Kong, Shanghai, Sydney, Singapore, Wellington, Taipei, Manila and Jakarta.

That came after all three main indexes on Wall Street ended sharply higher, having reversed early heavy selling.

Meanwhile, diplomatic efforts focused on Monday on the Strait of Hormuz, which has been blocked to nearly all oil tankers.

French President Emmanuel Macron said France was working with allies on a “purely defensive” mission to reopen the waterway.

About 10 vessels in or near the Strait of Hormuz have come under attack since Iran blocked the strait in retaliation for the US-Israeli strikes, shipping experts say.

Global shipping giant MSC announced it was formally halting some export shipments from the Gulf, while Bahrain’s state-owned energy company Bapco joined counterparts in Qatar and Kuwait in declaring “force majeure” - a warning that events beyond its control may lead it to miss export targets.

The Saudi defence ministry said on Monday it had thwarted a drone attack targeting an oil field in the kingdom’s east, near the Emirati border.

“It has been an incredibly wild ride for traders and investors to navigate the price action put to them over the past 24 hours, with breathtaking reversals taking place across many parts of the financial markets,” said Chris Weston, an analyst at Pepperstone.

“The pressure valve has clearly been released for now. However, volatility across energy markets remains exceptionally elevated.

“While the most extreme stress has eased, markets are still pricing a significant degree of uncertainty and risk.

“The geopolitical backdrop remains fluid, and traders should expect volatility to remain a defining feature of the trading environment in the days ahead.”