Matt Egan

(CNN Money) -- The energy market is swinging wildly ahead of President Trump's announcement on the fate of the Iran nuclear deal.

Crude oil prices plunged as much as 4.4% late Tuesday morning to $67.63 a barrel. Traders chalked it up to fears that Trump wouldn't deliver on his promise to pull out of the nuclear deal.

But then the price raced back, leaving crude down about 2.5% for the day. The rebound came after The New York Times reported that Trump had told French President Emmanuel Macron that the United States would in fact withdraw from the deal and re-impose sanctions on Iran.

The key for the energy market will be whether Trump takes aggressive action to prevent Iran from shipping oil overseas. That could hold prices down in a market that has already been short on supply because of production cuts by OPEC and Russia.

Trump is expected to announce that he will allow sanctions to go forward on Iran, a first step toward withdrawing from the nuclear deal, according to a US official and a person familiar with the plan.

But the sanctions could take months to go into effect as the US government develops guidance for companies and banks.

"People have been pricing in the worst-case scenario," said Hillary Stevenson, director of oil markets at research firm Genscape.

Crude oil prices settled above $70 a barrel on Monday for the first time since late 2014.

Officials cautioned that nothing is final until Trump makes his announcement from the Diplomatic Room of the White House at 2 p.m. ET, and held out the possibility that he could change course.

— CNN's Kevin Liptak contributed to this report.